Lakeside Resort Entr v. Bd Supv Palmyra Twp ( 2006 )

Opinions of the United
2006 Decisions States Court of Appeals
for the Third Circuit
7-20-2006
Lakeside Resort Entr v. Bd Supv Palmyra Twp
Precedential or Non-Precedential: Precedential
Docket No. 05-1163
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-1163
LAKESIDE RESORT ENTERPRISES, LP;
LAKESIDE WATERS EDGE, INC.;
PAUPACK HOLDING, INC.;
LAKESIDE WATER SYSTEM, INC.;
EDWIN, INC.; MARK GAWRON;
MARCELLA GAWRON;
GERALD GAWRON; JEROME GAWRON,
Appellants
v.
BOARD OF SUPERVISORS OF PALMYRA TOWNSHIP;
PALMYRA TOWNSHIP
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civil Action No. 01-cv-01238)
District Judge: Honorable Richard Caputo
Argued March 7, 2006
Before: AMBRO and STAPLETON, Circuit Judges,
STAGG,* District Judge
(Opinion filed: July 20, 2006 )
Jeremy A. Haugh, Esquire
Hamlin Corners Professional Building
P.O. Box 735
Hamlin, PA 18427-0735
Ronald V. Santora, Esquire (Argued)
Bresset & Santora
1188 Wyoming Avenue
Forty Fort, PA 18704
Counsel for Appellants
Patrick J. Murphy, Esquire (Argued)
Murphy, Piazza & Genello
Scranton Life Building, Suite 300
538 Spruce Street
P.O. Box 909
Scranton, PA 18501
Counsel for Appellees
OPINION OF THE COURT
*
Honorable Tom Stagg, Senior District Judge for the
Western District of Louisiana, sitting by designation.
2
AMBRO, Circuit Judge
We consider whether a proposed drug- and alcohol-
treatment facility, under the facts of this case, qualifies as a
dwelling under the Fair Housing Act. Due to funding
restrictions, residents of the facility would stay there for slightly
more than two weeks on average. But the facility is intended for
longer stays, and many stay longer. Moreover, while they are
there, the residents would treat the facility like a home. We
therefore deem it a dwelling under the Act.
I. Factual Background and Procedural History
In late summer 2000, Lakeside1 was negotiating to sell a
resort property to Greenway, Inc., which intended to use the
property as a drug- and alcohol-treatment center. That
September, they set a price of $1.75 million. The Lakeside
property—zoned as Community Commercial—sits on Lake
Wallenpaupack in Palmyra Township and includes a hotel-
restaurant complex.
In October 2000, Palmyra’s Board of Supervisors started
working on (and in January 2001 passed) a zoning ordinance
amendment that prohibited, among other things, drug- and
1
Plaintiffs/appellants are members of the Gawron family
and the various entities they own or control, including Lakeside
Resort Enterprises, LP. In this opinion, we use the name
Lakeside to refer to all of them.
alcohol-treatment centers in the Community Commercial
district. The Board then denied Lakeside’s application for a
conditional use of the property as a drug- and alcohol-treatment
center. As a result, the sale to Greenway fell through.
After losing the sale, Lakeside sued the Board in the
Middle District of Pennsylvania, challenging the validity of the
ordinance under, inter alia, the Fair Housing Amendments Act
(FHAA) of 1988,2 42 U.S.C. §§ 3601 et seq. Lakeside and the
Board both filed summary judgment motions, and in June 2003
the District Court denied Lakeside’s motion and all but a part of
the Board’s motion. The suit went to trial, but a mistrial was
declared after Lakeside had presented most of its testimony. A
new trial began in December 2004. At the close of Lakeside’s
case, the Board moved for a judgment as a matter of law, but the
Court denied it as to the FHAA claim. The Court denied
another motion for judgment as a matter of law (renewed by the
Board after its first witness), leaving two viable claims,3
including the FHAA claim.
The District Court decided sua sponte to reconsider its
2
Title VIII of the Civil Rights Act of 1968 is called the
Fair Housing Act. We refer to Lakeside’s claim as “the FHAA
claim” because it arises under a provision added to the Fair
Housing Act by the FHAA.
3
The other claim was under the Americans with
Disabilities Act (ADA).
4
denial of the Board’s motion for judgment as a matter of law on
the FHAA claim, reversed its decision on that motion, and
entered judgment for the Board under Federal Rule of Civil
Procedure 50(a). Lakeside then moved for reconsideration of
this decision. Before the District Court denied the
reconsideration motion (which it did in March 2005), Lakeside
filed a notice of appeal to our Court in January 2005.4
II. Jurisdiction and Standard of Review
The District Court had jurisdiction under 28 U.S.C.
§ 1331, and we have appellate jurisdiction under 28 U.S.C.
§ 1291.
Because the District Court entered a judgment as a matter
of law under Rule 50(a), our review is plenary. Rego v. ARC
Water Treatment Co. of Pa., 181 F.3d 396, 400 (3d Cir. 1999).
We “must view the evidence . . . in a light most favorable to the
non-moving party and must give the non-moving party the
benefit of all reasonable inferences that can be drawn in its
4
The notice of appeal did not become effective until after
the District Court ruled on the motion for reconsideration. Fed.
R. App. P. 4(a)(4)(B)(I).
The jury had returned a verdict for the Board in
December 2004 on the ADA claim; Lakeside’s notice of appeal
also covered this verdict. But this issue was not briefed to us, so
it is waived. Couden v. Duffy, 446 F.3d 483, 492 (3d Cir. 2006).
5
favor.” Id. We also “exercise plenary review over the question
of whether the district court applied an incorrect legal standard.”
Hovsons, Inc. v. Twp. of Brick, 89 F.3d 1096, 1101 (3d Cir.
1996).
III. Discussion
A.
The Fair Housing Act proscribes discrimination in the
sale of a dwelling due to a handicap5 of those who are to reside
in the dwelling after the sale. 42 U.S.C. § 3604(f)(1).6 A
5
We note that at least two other courts have held that
recovering alcoholics and drug addicts are handicapped, so long
as they are not currently using illegal drugs. See United States
v. S. Mgmt. Corp., 955 F.2d 914, 920–23 (4th Cir. 1992); Conn.
Hosp. v. City of New London, 129 F. Supp. 2d 123, 125 (D.
Conn. 2001); see also Innovative Health Sys., Inc. v. City of
White Plains, 117 F.3d 37, 48 (2d Cir. 1997) (same, under the
ADA and the Rehabilitation Act), abrogation on other grounds
noted by Zervos v. Verizon N.Y., Inc., 252 F.3d 163, 171 n.7 (2d
Cir. 2001).
6
This provision makes it unlawful
[t]o 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
6
dwelling is defined as “any building, structure, or portion
thereof which is occupied as, or designed or intended for
occupancy as, a residence by one or more families, and any
vacant land which is offered for sale or lease for the construction
or location thereon of any such building, structure, or portion
thereof.” Id. § 3602(b).
We must decide whether the proposed drug- and alcohol-
treatment facility is a dwelling under the Fair Housing Act. In
making this decision, we are to give a “generous construction”
to the statute’s “broad and inclusive” language. Trafficante v.
Metro. Life Ins. Co., 409 U.S. 205, 209, 212 (1972). Our Court
has dealt with similar issues twice before. In United States v.
Columbus Country Club, we decided that a summer bungalow
was a dwelling. 915 F.2d 877, 881 (3d Cir. 1990). Then, in
Hovsons, Inc. v. Township of Brick, we held that a nursing home
was a dwelling. 89 F.3d 1096, 1102 (3d Cir. 1996).
As “family” in the statute “includes a single individual,”
42 U.S.C. § 3602(c), Columbus Country Club held that
“residence” is the key word in the dwelling definition, 915 F.2d
at 881. Because “residence” is not defined in the statute, we
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).
7
looked instead to the dictionary definition applied by another
court 15 years earlier. Id. (citing United States v. Hughes Mem’l
Home, 396 F. Supp. 544, 549 (W.D. Va. 1975)). Under that
definition, a residence is “a temporary or permanent dwelling
place, abode or habitation to which one intends to return as
distinguished from the place of temporary sojourn or transient
visit.” Id. (internal quotation marks omitted).
Moving to the “dwelling” analysis, we then held that “the
central inquiry [was] whether the [country club’s] members
intend to remain in the bungalows for any significant period of
time and whether they view their bungalows as a place to return
to.” Id. Accordingly, we concluded that the Act “‘would
presumably cover . . . facilities whose occupants remain for
more than a brief period of time and who view their rooms as a
residence “to return to.”’” Id. (quoting R. Schwemm, Housing
Discrimination Law 53 (1983)) (omission in original). We also
noted that there was “no indication in the statutory language that
Congress intended to limit coverage of the Act to year-round
places of abode and exempt seasonal dwellings.” Id. Because
the country club’s members returned nearly every summer to the
bungalows and spent up to five months in them, we held that the
bungalows were residences. Id.We also wrote approvingly of three cases from other
courts, cases holding that a motel was not a dwelling, Patel v.
Holley House Motels, 483 F. Supp. 374, 381 (S.D. Ala. 1979),
that a children’s home with a four-year average stay was a
8
dwelling, United States v. Hughes Mem’l Home, 396 F. Supp.
544, 549 (W.D. Va. 1975), and that a hospice for terminally ill
AIDS patients was a dwelling, Baxter v. City of Belleville, 720
F. Supp. 720, 731 (S.D. Ill. 1989). See Columbus Country Club,
915 F.2d at 881.
In our 1996 Hovsons case, we had to decide whether a
nursing home was a dwelling. After reviewing Columbus
Country Club’s analysis, we stated simply: “To the handicapped
elderly persons who would reside there, [the facility] would be
their home, very often for the rest of their lives. We therefore
hold that the proposed nursing home is a ‘dwelling’ within the
meaning of § 3602(b).” Hovsons, 89 F.3d at 1102.
The District Court, in its summary judgment opinion,
decided that the record was not clear on how long the residents
were going to stay at the Lakeside treatment facility, so it held
that there was a genuine issue of material fact and denied
summary judgment on the FHAA claim. But in its Rule 50(a)
judgment as a matter of law—after trial testimony on the
average length of stay—the Court held that the facility would
not be a dwelling. First, it determined that 14.8 days (the
average resident stay) was not a significant period of time.
Second, it determined that the residents would not view the
facility as a place to return to because they would live there
solely for treatment. Third, it determined that the residents
would be like mere transients because they would not view the
facility as a permanent residence and, as pointed out, they would
9
be there solely for treatment.
Before we begin the analysis in this case, we note that
other courts have also addressed similar issues. Some have
applied the Fair Housing Act to various facilities without
explicitly addressing the “dwelling” question.7 See, e.g.,
Turning Point, Inc. v. City of Caldwell, 74 F.3d 941, 945 (9th
Cir. 1996) (homeless shelters); United States v. S. Mgmt. Corp.,
955 F.2d 914, 923 (4th Cir. 1992) (drug- and alcohol-treatment
facility). Several other courts have addressed the issue, coming
out on both sides. See, e.g., Schneider v. County of Will, 190 F.
Supp. 2d 1082, 1087 (N.D. Ill. 2002) (a bed and breakfast is not
a dwelling); Cohen v. Twp. of Cheltenham, 174 F. Supp. 2d 307,
323 (E.D. Pa. 2001) (a children’s group home with an
anticipated stay of nine or ten months is a dwelling); Conn.
Hosp. v. City of New London, 129 F. Supp. 2d 123, 135 (D.
7
And both the Sixth Circuit and (perhaps) Congress
suggest that group homes are presumably dwellings. See, e.g.,
Larkin v. Mich. Dep’t of Soc. Servs., 89 F.3d 285, 289 (6th Cir.
1996) (“It is well-settled that the FHAA applies to the regulation
of group homes.”); H.R. Rep. No. 100-711, at 24 (1988), as
reprinted in 1988 U.S.C.C.A.N. 2173, 2185 (discussing the
kinds of discrimination the Committee intended to prohibit
under the FHAA, and noting in particular “the enactment or
imposition of health, safety or land-use requirements on
congregate living arrangements among non-related persons with
disabilities”).
10
Conn. 2001) (group homes for alcohol and drug treatment, in
which residents stayed on average six weeks, are dwellings);
Garcia v. Condarco, 114 F. Supp. 2d 1158, 1163 (D.N.M. 2000)
(a city jail is not a dwelling); Project Life, Inc. v. Glendening,
No. WMN-98-2163, 1998 WL 1119864, at *2 & n.4 (D. Md.
Nov. 30, 1998) (suggesting that a decommissioned Navy
hospital ship offering one-month stays to women recovering
from substance abuse would be a dwelling); Villegas v. Sandy
Farms, Inc., 929 F. Supp. 1324, 1328 (D. Or. 1996) (cabins
occupied by migrant farm workers during the five-month harvest
season are dwellings); Hernandez v. Ever Fresh Co., 923 F.
Supp. 1305, 1308–09 (D. Or. 1996) (same).
B.
To repeat what we quoted above from Columbus Country
Club, two factors determine whether a specific facility is a
dwelling under the Fair Housing Act. First, we must decide
whether the facility is “intended or designed” for occupants who
“intend to remain in the [facility] for any significant period of
time.” 915 F.2d at 881. Second, we must determine whether
those occupants would “view [the facility] as a place to return
to” during that period. Id.
1. Is the facility intended or designed for occupants
who would intend to remain for a significant
period of time?
11
We have not defined what is a “significant period of
time” other than to say that (1) five months is significant, id.,
and (2) “for the rest of [the occupants’] lives” is significant,
Hovsons, 89 F.3d at 1102. Cases from other courts, cited above,
have found sufficient stays ranging from one month to four
years.
Trial testimony here put the likely average stay at the
proposed facility at 14.8 days. In Greenway’s “early days,” the
average stay was 30 days. (In fact, at least one Greenway
resident stayed more than a year.) The 14.8-day stay appears to
result chiefly from caps on health-insurance funding, because
people—those on “scholarship”—who stay at Greenway’s
expense often stay longer than that.
But the short, funding-limited, average stay is not
dispositive here. Congress considered a dwelling to be a facility
“which is occupied as, or designed or intended8 for occupancy
8
The Board argues that, because the Lakeside facility
was built as a hotel, it cannot meet § 3602(b)’s requirement that
a dwelling be “designed or intended for occupancy . . . as a
residence.” We disagree. Though the facility was built as a
hotel, Greenway was planning to turn it into a drug- and
alcohol-treatment center. Somewhat analogously, Baxter
(which we approved of in Columbus Country Club) involved an
office building that was intended to be converted into an AIDS
hospice. 720 F. Supp. at 731. As in Baxter, we look here to
Greenway’s intent to make the Lakeside property a residential
12
as, a residence by one or more families.” 42 U.S.C § 3602(b)
(emphasis added). The facility (as we infer from the experience
of Greenway’s other facilities) is intended to accommodate 30-
day stays as a matter of course and even longer stays on
occasion. Congress did not, by its words, require only that a
facility be “occupied as” a residence. Thus, that health-
insurance funding limits some residents to 14.8 days or less does
not itself deprive the proposed Lakeside facility of its residential
status.
Moreover, the 14.8-day stay is an average. This suggests
that some people—possibly half, depending on how the average
was calculated—stay longer than 14.8 days. The residents on
“scholarship,” for example, stay longer because they are not
limited by funding. In any event, the statute refers to “any
building, structure, or portion thereof.” 42 U.S.C. § 3602(b)
(emphasis added). Some rooms in the facility—i.e., a “portion
thereof”—would house residents staying for extended periods,
thereby satisfying with ease the significant-stay factor.
While 14.8 days is much shorter than the five months we
have previously held to have been a “significant period of time,”
it is certainly longer than the typical stay in a motel9 or a bed
treatment center.
9
In 2004, 63% of business travelers, and 73% of leisure
travelers, spent only one or two nights per hotel stay. Am. Hotel
& Lodging Ass’n, 2005 Lodging Industry Profile 4 (2005),
13
and breakfast, which have been held not to be dwellings under
the Fair Housing Act, see Schneider, 190 F. Supp. 2d at 1087;
Patel, 483 F. Supp. at 381. In this context, we conclude that the
14.8-day average stay at the proposed facility is more nuanced
than perceived at first blush, and qualifies that facility under the
first factor of Columbus Country Club.
2. Do occupants view the facility as a place to
return to?
Columbus Country Club’s second factor (“place to return
to”) was significant in that case, as club members returned to
their bungalows every summer. What we meant by viewing a
bungalow as a “place to return to” is that the country club’s
members saw their individual bungalows as homes. The
members repeatedly returned to the same bungalow because
they felt at home there.10 Similarly, we noted in Hovsons that,
“[t]o the handicapped elderly persons who would reside there,
[the nursing facility] would be their home, very often for the rest
of their lives.” 89 F.3d at 1102 (emphasis added); see also
Villegas, 929 F. Supp. at 1328 (“Like the occupants of a
homeless shelter, during the farmworkers’ employment . . . , the
http://www.ahla.com/pdf/Lodging-Ind-Profile-2005.pdf.
10
The members did not actually own particular
bungalows. They owned the land collectively and leased the
bungalows from the club. Columbus Country Club, 915 F.2d at
879.
14
cabins are their homes.” (emphasis added)).11
Trial testimony about the experience at other Greenway
facilities showed that the Lakeside residents would eat meals
together (separated by gender), return to their rooms in the
evening, receive mail at the facility, and make it their
“residence” while they were there. Lakeside’s counsel at oral
argument added that Greenway residents hung pictures on their
walls and had visitors in their rooms. Although residents in
treatment were apparently not allowed off the grounds of the
facility unsupervised, testimony showed that treated it like a
home for the duration of their stays. This satisfies (though
barely) the second factor of Columbus Country Club.
*****
Because the Lakeside facility was intended to house
persons for a significant period of time and because those
persons would have viewed it as their home during that time, we
hold that it is a dwelling under the Fair Housing Act.
C.
Lakeside argues in its opening brief that, if we hold that
11
On the other hand, visitors to motels and bed and
breakfasts do not see those places as their homes. See
Schneider, 190 F. Supp. 2d at 1087; Patel, 483 F. Supp. at 381.
15
the proposed facility is a dwelling, we should also decide in its
favor on (1) whether the ordinance amendment was
discriminatory and, if so, (2) whether its adoption was properly
justified. The Board argues that these issues are not before us
on this appeal.
We agree with the Board. These issues were headed to
the jury before the District Court deflected them with its
judgment as a matter of law. Having held that the facility is a
dwelling, we remand these issues to be determined.
IV. Conclusion
We hold that the facility intended by Greenway as a
drug- and alcohol-treatment facility is a dwelling under the Fair
Housing Act. Therefore, we reverse the District Court’s order
and remand the case for further proceedings.
16