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Girard Finance Company and Thomas Richter v. Pennsylvania Human Relations Commission

July 27, 2012

GIRARD FINANCE COMPANY AND THOMAS RICHTER, PETITIONERS
v.
PENNSYLVANIA HUMAN RELATIONS COMMISSION, RESPONDENT



The opinion of the court was delivered by: Anne E. Covey, Judge

Argued: June 4, 2012

BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, Judge HONORABLE ANNE E. COVEY, Judge HONORABLE ROCHELLE S. FRIEDMAN, Senior Judge

OPINION BY JUDGE COVEY

Girard Finance Company (Girard Finance) and Thomas Richter (Richter) appeal from the Pennsylvania Human Relations Commission's (PHRC) October 24, 2011 Final Order requiring Girard Finance and Richter to cease and desist from unlawfully discriminating against Kevin Harris (Harris) and others because of their race and/or national origin; directing Girard Finance and Richter to pay various money damages to Harris and each of the similarly situated individuals; directing Girard Finance and Richter to each pay a civil penalty; directing Girard Finance to provide its employees with training regarding non-discriminatory practices; directing Girard Finance to develop and implement a recording system to track all of its transactions; and directing Girard Finance and Richter to report to the PHRC the means by which it will comply with the order. There are five issues before the Court: (1) whether the PHRC erred as a matter of law when it asserted its legal authority and jurisdiction over commercial loans made to corporate tavern owners; (2) whether Harris and the other similarly situated Claimants had standing to bring this claim under the Pennsylvania Human Relations Act (PHRA);*fn1 (3) whether certain claims were barred by the statute of limitations; (4) whether the PHRC proved that the loans at issue were predatory and/or the PHRC proved racial discrimination in Girard Finance's lending practices; and (5) whether the PHRC erred as a matter of law in awarding damages for which there was no record evidence, let alone the required substantial evidence.

On or about January 10, 2005, Harris filed a verified complaint*fn2 with the PHRC on behalf of himself and other similarly situated persons.*fn3 Harris alleged that Girard Finance unlawfully discriminated against him and other similarly situated persons on account of their race in the terms and conditions of loans of money and in the terms and conditions of real estate-related transactions.*fn4 Public hearings in this matter were convened before Permanent Hearing Examiner Phillip A. Ayers (PHE Ayers) on April 23-25, April 30, May 1, June 4, and July 14-16, 2008. On or about February 22, 2008, Girard Finance and Richter filed a Motion for Summary Judgment. On April 10, 2008, an Interlocutory Order was issued denying the summary judgment motion. On May 27, 2011, PHE Ayers held an additional day of hearing. On August 11, 2011, PHE Ayers found that Harris and other similarly situated persons had proven unlawful discrimination in violation of Sections 5(h)(1) and (4) of the PHRA.*fn5 On October 24, 2011, a Final Order was entered adopting and incorporating PHE Ayers' findings of fact, conclusions of law, opinion and proposed order from which this appeal was filed.*fn6

Girard Finance and Richter first argue that the PHRC erred as a matter of law when it asserted its legal authority and jurisdiction over commercial loans made to corporate tavern owners. We disagree.

Section 7 of the PHRA, 43 P.S. § 957, lists the powers and duties of the PHRC. Section 7(f) of the PHRA, expressly authorizes the PHRC "[t]o initiate, receive, investigate and pass upon complaints charging unlawful discriminatory practices." 43 P.S. § 957(f). Section 5(h)(8) of the PHRA makes it unlawful to "[d]iscriminate in real estate-related transactions." 43 P.S. § 955(h)(8). "[R]eal estate-related transactions" include "the making or purchasing of loans . . . for . . . commercial property." Section 4(y)(1) of the PHRA, 43 P.S. § 954(y)(1).

Moreover, this Court has specifically held that "under the [PHRA], the [PHRC] has both the jurisdiction and the authority to investigate, prosecute and remedy unlawful housing discrimination practices in the Commonwealth, including claims of reverse redlining." McGlawn v. Pa. Human Relations Comm'n, 891 A.2d 757, 766 (Pa. Cmwlth. 2006). The instant case concerns real estate-related discrimination involving reverse redlining.*fn7 Accordingly, the PHRC did not err when it asserted its legal authority and jurisdiction over commercial loans made to corporate tavern owners.

Girard Finance and Richter next argue that Harris and the other similarly situated Claimants did not have standing to bring this claim under the PHRA. Specifically, Girard Finance and Richter contend that Claimants Harris, Maraeble, Davis, Colon, Smith, Biggers, and Roach are individuals and did not enter into any of the loan agreements that were at issue before the PHRC, thus, they do not have a substantial, direct, and immediate interest in this matter. They assert that Skintight Lounge, Inc. (Skintight)*fn8 is the only Claimant with standing as Skintight actually entered into a loan agreement with Girard Finance. We disagree.

"Standing is a core jurisprudential requirement that looks to the party bringing the legal challenge and asks whether that party has actually been aggrieved as a prerequisite before the court will consider the merits of the legal challenge itself." R.H.S. v. Allegheny County Dep't of Human Servs., Office of Mental Health, 936 A.2d 1218, 1229 (Pa. Cmwlth. 2007) (quoting Commonwealth ex rel. Judicial Conduct Bd. v. Griffin, 591 Pa. 351, 360, 918 A.2d 87, 93 (2007)).

The evidence establishes, and PHE Ayres found, that the loans were made to the corporations and the individuals. Certified Record (C.R.), Vol. 1, tab 1 at 60. In addition, Richter testified that personal guarantees were standard documents in his loan transactions. Notes of Testimony (N.T.), June 4, 2008 at 148. As the subject matter of the complaint is the loans, and the individuals were personally liable for said loans, the individuals had standing to bring the claims. Accordingly, Claimants Harris, Maraeble, Davis, Colon, Smith, Biggers, and Roach had standing to bring their claims under the PHRA.

Hargraves v. Capital City Mortg. Corp., 140 F.Supp.2d 7, 20 (D.D.C.2000) (citations omitted).

Girard Finance and Richter next contend that certain claims were barred by the statute of limitations. Specifically, Girard Finance and Richter contend that under the PHRA claimants have 180 days from the date of discrimination to bring a claim. Section 9(h) of the PHRA, 43 P.S. § 959(h). They assert that Maraeble's bar was sold on February 3, 2004, thus, the filing of Harris' complaint on January 10, 2005, is well past the statute of limitations. Similarly, they assert that Davis' last loan advance occurred on April 8, 2004, making her claim beyond the 180 days, and lastly, Biggers' bar was sold on December 2, 2004, ending her dealings with Girard Finance and Richter, and making her claim beyond the 180 days.

The PHRC argues that similarly situated persons are not required to individually comply with the PHRA's statute of limitations requirement. It asserts that the PHRC's regulations explicitly provide that: "the date of the occurrence of the practice will be deemed to be any date subsequent to the occurrence of the practice up to and including the date upon which the unlawful discriminatory practice shall have ceased." 16 Pa.Code § 42.14(a). The PHRC further argues that because Girard Finance and Richter had a practice and/or policy of predatory lending, it is a serial and/or systematic violation, thus, under Jensen v. Frank, 912 F.2d 517 (1st Cir. 1990), the similarly situated Claimants can be deemed to have timely filed their complaints. We agree with the PHRC.

Section 9(h) of the PHRA provides that "[a]ny complaint filed pursuant to this section must be so filed within one hundred eighty days after the alleged act of discrimination . . . ." 43 P.S. § 959(h). However, "[a] plaintiff may rely on the continuing violation doctrine to recover for discriminatory acts that fall outside the . . . limitations period." Barra v. Rose Tree Media Sch. Dist., 858 A.2d 206, 213 (Pa. Cmwlth. 2004).

The United States Supreme Court addressed the continuing violation doctrine in Havens Realty Corporation v. Coleman, 455 U.S. 363 (1982).

The Havens Court held that where a plaintiff challenges not just one incident of conduct violative of the Fair Housing Act (FHA),*fn9 but an unlawful practice that continues into the limitations period, the complaint is timely when it is filed within 180 days of the last asserted occurrence of that practice. Id. In Havens, the petitioners argued that respondents' claims [were] time-barred under § 812(a) of the Fair Housing Act, 42 U.S.C. § 3612(a). That section requires that a civil suit be brought within 180 days after the alleged occurrence of a discriminatory housing practice. As petitioners note, although five different specific incidents allegedly in violation of the Fair Housing Act are detailed in the complaint, the four involving Coleman occurred more than 180 days before the complaint was filed, and the fifth, which was within 180 days of filing, involved only Coles, whose claims are already the subject of a consent order entered by the District Court. The Court of Appeals, adopting a 'continuing violation' theory, held that because the Coles incident fell within the limitations period, none of the claims [were] barred.

Id., 455 U.S. at 380 (emphasis added). The United States Supreme Court agreed with the Court of Appeals and explained:

[A] 'continuing violation' of the Fair Housing Act should be treated differently from one discrete act of discrimination. Statutes of limitations . . . are intended to keep stale claims out of the courts. Where the challenged violation is a continuing one, the staleness concern disappears. . . . [W]e therefore conclude that where a plaintiff, pursuant to the Fair Housing Act, challenges not just one incident of conduct violative of the Act, but an unlawful practice that continues into the limitations period, the complaint is timely when it is filed within 180 days of the last asserted occurrence of that practice.

Id., 455 U.S. at 381 (citations and footnote omitted).

In the instant case, Girard Finance and Richter were not charged with isolated acts of reverse redlining, but rather, the unlawful practice of predatory lending. Thus, because Harris' complaint was filed within 180 days of the last asserted occurrence of the practice, Maraeble, Davis, and Bigger's claims are timely. ...


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