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Morris v. West Hayden Estates First Addition Homeowners Association, Inc.

United States District Court, D. Idaho

April 4, 2019

JEREMY R. MORRIS, KRISTY MORRIS, Plaintiffs/Counter-Defendants,
v.
WEST HAYDEN ESTATES FIRST ADDITION HOMEOWNERS ASSOCIATION, INC., Defendant/Counter-Claimant.

          MEMORANDUM DECISION AND ORDER

          B. LYNN WINMILL U.S. DISTRICT COURT JUDGE

         INTRODUCTION

         Three motions are presently before the Court: Jeremy Morris' and Kristy Morris' Motion for Injunctive Relief in the Form of De-Annexation from the West Hayden Estates Homeowners Association (Dkt. 107); West Hayden Estates First Addition Homeowners Association, Inc.'s (hereinafter, “Homeowners Association”) Motion for Judgment as a Matter of Law Pursuant to Federal Rule of Civil Procedure 50(b); and the Homeowners Association's Motion to Strike Affidavits of Jeremy Morris, Lorilee Anne Addy, and Russell Deming (Dkt. 115). The Court GRANTS the Homeowners Association's Motion for Judgment as a Matter of Law. Plaintiffs' Motion for Injunctive Relief in the Form of De-Annexation from the West Hayden Estates Homeowners Association (Dkt. 107) and the Homeowners Association's Motion to Strike Affidavits of Jeremy Morris, Lorilee Anne Addy, and Russell Deming[1] (Dkt. 115) are DENIED.

         LEGAL STANDARD

         1. Judgment as a Matter of Law

         Federal Rule of Civil Procedure 50 governs a request for a judgment as a matter of law. Under Rule 50(a), a party must first move for judgment as a matter of law before the case is submitted to the jury and “specify . . . the law and facts that entitle the movant to the judgment.” Fed.R.Civ.P. 50(a)(2). Under Rule 50(b), if the court denies the pre-verdict motion, “the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59.” Fed.R.Civ.P. 50(b). The failure to make a Rule 50(a) motion before the case is submitted to the jury forecloses the possibility of the Court later considering a Rule 50(b) motion.[2] Tortu v. Las Vegas Metropolitan Police Dep't., 556 F.3d 1075, 1083 (9th Cir. 2009). Furthermore, “[a] post-trial motion for judgment can be granted only on grounds advanced in the pre-verdict motion.” Fed.R.Civ.P. 50(b), advisory committee's note to 1991 amendment.

         A court may grant a Rule 50 motion for judgment as a matter of law only if “there is no legally sufficient basis for a reasonable jury to find for that party on that issue.” Krechman v. County of Riverside, 723 F.3d 1104, 1109 (9th Cir. 2013) (citing Jorgensen v. Cassiday, 320 F.3d 906, 917 (9th Cir. 2003) (quoting Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 149 (2000))). “A jury's verdict must be upheld if it is supported by substantial evidence . . . even if it is also possible to draw a contrary conclusion from the same evidence.” Wallace v. City of San Diego, 479 F.3d 616, 624 (9th Cir. 2007). “[I]n entertaining a motion for judgment as a matter of law, the court . . . may not make credibility determinations or weigh the evidence.” E.E.O.C. v. Go Daddy Software, Inc., 581 F.3d 951, 961 (quoting Reeves, 530 U.S. at 150). Rather, “[t]he evidence must be viewed in the light most favorable to the nonmoving party, and all reasonable inferences must be drawn in favor of that party.” Id.

         2. New Trial Pursuant to Rule 59(d)

         Rule 59(d) provides that “[n]o later than 28 days after the entry of judgment, the court, on its own, may order a new trial for any reason that would justify granting one on a party's motion.”[3] A trial court has not only the right but “indeed the duty . . . to weigh the evidence as he [or she] saw it . . . and to set aside the verdict of the jury, even though supported by substantial evidence, where, in his [or her] conscientious opinion, the verdict is contrary to the clear weight of the evidence, or is based upon evidence which is false, or to prevent, in the sound discretion of the trial judge, a miscarriage of justice.” Moist Cold Refrigerator Co. v. Lou Johnson Co., 249 F.2d 246, 256 (9th Cir. 1957).

         “Although a court need not consider the evidence in a manner that favors the prevailing party and it may grant a new trial even if there is some evidence in support of the prior decision, it should not grant a new trial unless it more than simply disagree[s] with the verdict.” Gates v. Boyle, No. CV 05-59-M-DWM, 2007 WL 9710298, at *1 (D. Mont. Mar. 15, 2007) (Molloy, J.) (internal quotation omitted). “[A] decent respect for the collective wisdom of the jury, and for the function entrusted to it in our system, certainly suggests that in most cases the judge should accept the findings of the jury, regardless of his own doubts in the matter.” Landes Const. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir. 1987) (citation omitted). “Nonetheless, a new trial is appropriate where the court has a firm conviction of the jury's error and an attendant miscarriage of justice.” Gates, 2007 WL 9710298, at *1 (internal quotations omitted). Unlike a Rule 50 motion, under Rule 59 the trial court may assess the credibility of the witnesses. See Kode v. Carlson, 596 F.3d 608, 612 (9th Cir. 2010) (per curiam). A new trial may also be granted if the Court concludes that a party was prejudiced by erroneous evidentiary decisions or by some other unfairness in the trial. See Gilbrook v. City of Westminster, 177 F.3d 839, 858 (9th Cir. 1999).

         3. Remittitur

         Rule 59 also allows the trial court to “grant a defendant's motion for a new trial or conditionally deny the motion, provided the plaintiff accepts a remittitur.” J.N. v. Hendrickson, No. 214CV02428DDPPLAX, 2017 WL 2539390, at *3 (C.D. Cal. June 12, 2017) (citing Fenner v. Dependable Trucking Co., Inc., 716 F.2d 598, 603 (9th Cir. 1983). The reduced award “must reflect the maximum amount sustainable by the proof.” Oracle Corp. v. SAP AG, 765 F.3d 1081, 1094 (9th Cir. 2014) (internal quotation and citation omitted). “The plaintiff may choose either to accept the reduced damage award or to submit to a new trial.” Hendrickson, 2017 WL 2539390, at *3. Broadly, remittitur is appropriate when the damages are “grossly excessive or monstrous, clearly not supported by the evidence, or only based on speculation or guesswork.” Los Angeles Memorial Coliseum Comm'n v. Nat'l Football League, 791 F.2d 1356, 1360 (9th Cir. 1986).

         4. Interpretation of CC&R Provisions

         Restrictive covenants are valid and enforceable in Idaho. Sun Valley Ctr. v. Sun Valley Co., 107 Idaho 411, 413 (1984). A number of principles apply when a Court interprets CC&Rs. First, “covenants are not to be construed to extend by implication any restriction not clearly expressed in the covenants.” Brown v. Perkins, 129 Idaho 189, 192 (1996). Second, “all doubts and ambiguities are to be resolved in favor of the free use of land.” Id.

         Other than the rule that CC&R provisions will not be extended by implication, ordinary rules of construction apply when interpreting CC&R provisions. Sun Valley Ctr., 107 Idaho at 413. Where the terms of the CC&R provisions are clear, interpretation is a question of law. City of Chubbuck v. City of Pocatello, 127 Idaho 198, 201 (1995). Conversely, where the terms of the CC&R provisions are ambiguous, interpretation is a question of fact. St. Clair v. Krueger, 115 Idaho 702, 704 (1989).

         ANALYSIS

         The Court's decision will proceed in the following fashion. First, the Court will offer two prefatory observations regarding the key piece of evidence in this case and an evidentiary issue that unfairly prejudiced the Homeowners Association. Then, the Court will evaluate the specific evidentiary deficiencies for each of Plaintiffs' three Fair Housing Act claims. Finally, the Court will evaluate the Homeowners Association's counterclaim.

         1. An Ordinary Reader Would Not Interpret the Letter Sent by the Homeowners Association to Plaintiffs as Discriminating on the Basis of Plaintiffs' Religion

         A. Background

         The Court begins by reviewing the evidence that forms the crux of Plaintiffs' case: the letter sent by Board Member Pat Kellig to Plaintiffs on January 15, 2015 (hereinafter, the “January 2015 Letter”). Exhibit 3005[4]. The first draft of the January 2015 Letter was written by West Hayden resident and former member of the West Hayden Homeowners Association Board Larry Strayer. In his draft, which Mr. Strayer shared with the Board via email on January 14, 2015, Mr. Strayer first identified a number of CC&R provisions that he believed Plaintiffs' Christmas program would violate. Exhibit. 1091. Then, Mr. Strayer added the following conclusion:

And finally, I am somewhat hesitant in bring up the fact that some of our residents are avowed atheists and I don't even want to think of the problems that could bring up. It is not the intention of the Board to discourage you from becoming part of our great neighborhood but we do not wish to become entwined in any expensive litigation to enforce long standing rules and regulations and fill our neighborhood with the riff-raff you seemed to attract over by WalMart.. [sic] Grouse Meadows indeed!!! We don't allow "those kind" in our neighborhood.

Exhibit 1091 at 2. Mr. Strayer's draft was subsequently reviewed and edited by several members of the Board, including Board President Jennifer Scott and Ms. Kellig. Ms. Kellig circulated a draft on January 15, 2015 in which she “changed the atheist bit and toned . . . [the draft] down.” Exhibit 1091 at 3.

         Even though Ms. Kellig did not have Board approval to send the January 2015 Letter, which was still being edited, Ms. Kellig nevertheless sent it to Plaintiffs. The version of the January 2015 Letter sent to Plaintiffs changed Mr. Strayer's language to the following:

And finally, I am somewhat hesitant in bringing up the fact that some of our residents are non-Christians or of another faith and I don't even want to think of the problems that could bring up. It is not the intention of the Board to discourage you from becoming part of our great neighborhood but we do not wish to become entwined in expensive litigation to enforce long standing rules and regulations and fill our neighborhood with the hundreds of people and possible undesirables. We have worked hard to keep our area peaceful, quiet, and clean. Neighbors respect the CC&R's [sic] and show common courtesy to those around them. These are why people want to live here.

Exhibit 3005.

         B. Analysis

         Before turning to the analysis below, the Court acknowledges that at the summary judgment phase of this proceeding, it concluded, largely on the basis of January 2015 Letter, that West Hayden was not entitled to summary judgment. Specifically, the Court stated that “the letter . . . coupled . . . with other statements . . . [suggesting that members of the West Hayden Board had a] personal animus [towards Plaintiffs]” was sufficient to survive summary judgment. Dkt. 59, 42:9-16.

         In retrospect, the Court believes that its earlier decision was in error. The Board's revisions to Mr. Strayer's draft demonstrate that it was not the Board's intent to discriminate against Plaintiffs based on their religion. To the contrary, an ordinary reader would plainly understand the Board's statement that “some of our residents are non-Christians or of another faith and I don't even want to think of the problems that could bring up” (Exhibit 3005) as an attempt to express a concern that Plaintiffs' Christmas program, if allowed to proceed, would leave non-Christian homeowners in the West Hayden Estates with the impression that an exception was being made to the CC&Rs in favor of Christians. Far from being intolerant, the January 2015 Letter's religious reference was an attempt to respect religious pluralism. Furthermore, the January 2015 Letter's use of the term “undesirables” is an attempt raise the safety concerns associated with bringing a large number of unknown individuals to a normally quiet and calm area. Though the language was not drafted with lawyerly precision, an ordinary reader reviewing the January 2015 Letter would not infer, based solely on the writing's contents, that the Board intended to discriminate against Plaintiffs based on their Christian faith.

         Beyond the plain text of the January 2015 Letter, the circumstances in which it was sent also demonstrate that the Board did not intend to discriminate against Plaintiffs. To begin with, the initial draft of the January 2015 Letter was written by a former, rather than current, board member, Mr. Strayer. Of course, Mr. Strayer was likely an agent of the Board given that he was acting at the request of Board President Jennifer Scott, but nevertheless it is telling that the most incendiary language in this case was drafted by a non-party to this lawsuit. Furthermore, Mr. Strayer's language was immediately “toned … down” when it was reviewed by an actual member of the Board, Ms. Kellig. As such, the draft language has little if any relevance to the Board's actual intent; at most, it reveals Mr. Strayer's feelings about Plaintiffs' Christmas program.

         Additionally, any intent by the Board to discriminate is also belied by the fact that Ms. Kellig did not obtain final approval from the Board before she sent the January 2015 Letter to Plaintiffs. Thus, the January 2015 Letter provides, at most, an incomplete picture as to the Board's true intent. Indeed, Ms. Scott testified that had she had the opportunity to review the January 2015 Letter before Ms. Kellig sent it out, she would not have approved of sending it. Although Ms. Scott's testimony may have been partially a product of hindsight, it is still true that the January 2015 Letter lacked the Board's official approval and did not, in any event, reflect an intent to discriminate.[5]

         Finally, the timeframe in which the January 2015 Letter was drafted and sent confirms that the Homeowners Association did not intend to discriminate against Plaintiffs. Plaintiffs entered into a purchase contract for their home on January 5, 2015. Exhibit 3009. Shortly thereafter, on January 12, 2015, Mr. Morris called Ms. Scott to alert her and the Board that he (1) was about to close on a home in West Hayden Estates and (2) intended to use that home for his Christmas program. Mr. Morris informed Ms. Scott that he needed a quick answer regarding whether the Board would oppose his Christmas program on the basis that it violated the CC&Rs. In response, the Board met on January 13th, and the January 2015 Letter was thereafter drafted and sent to Mr. Morris. Exhibit 1091; Exhibit 3005. From this series of events, it is evident that rather than attempting to interfere with Plaintiffs' purchase of the home, the Board was in fact acting in a solicitous manner by trying to get Plaintiffs the quick answer that Mr. Morris was asking for.

         2. West Hayden Was Unfairly Prejudiced by the Admission of Ultimately Stricken Evidence Regarding Threats from West Hayden Homeowners to Plaintiffs and Christmas Program Attendees

         The trial in this case was also infected by repeated testimony and exhibits related to threats allegedly received by Plaintiffs and other attendees of the Christmas program from homeowners in the West Hayden Estates. For example, Ms. Morris testified that “[w]e had a neighbor that came to our driveway that threatened to kill my husband. And we took the threat seriously. And so it was advised that I just -- I take my daughter and I leave.” Ms. Morris identified the individual who threatened to kill her husband as West Hayden homeowner Larry Bird. Additionally, Tatyana Burda, Katie Dotts, Jessica Hotvedt, Annabelle Sky Farley, Blaine Svetich, David Silva, Russell Deming all testified that they witnessed threating behavior from individuals who appeared to be West Hayden homeowners.

         The jury also heard Exhibit 3034, in which Mr. Morris surreptitiously recorded a conversation he had with Board Member Ron Taylor. During that exchange, Mr. Morris made the following statement “How about we circulate a letter about Larry Bird threatening to murder my family, by the way it is on tape. It is on tape, played it for the Sheriff's Deputies. It is on tape, says he is gonna take care of me and that the people that showed up, the militia people or whatever the three percenters could not protect me.” Exhibit 3034, 4:50-5:06.

         After this evidence was offered, but before Plaintiffs' counsel could solicit additional testimony from Mr. Morris on the subject, the Court ordered briefing with respect to whether, under the Fair Housing Act, the Homeowners Association had a duty to police and correct discriminatory behavior from homeowners who were not members of the Board. After reviewing the briefing and case law, the Court concluded that West Hayden could not be held liable for conduct by non-party homeowners because it lacked the ability to police and effectively control the actions of the homeowners that were allegedly discriminating against Plaintiffs and the Christmas program attendees.[6] The Court therefore barred Mr. Morris from testifying regarding the alleged death threat made by Mr. Bird and barred Plaintiffs' counsel from introducing Mr. Morris' surreptitious recording of that incident. Additionally, the following instruction was provided to the jury prior to their deliberations:

The Homeowners Association is only liable for actions taken by (1) members of the Board, (2) agents of the HOA, and (3) employees of the HOA. The Homeowners Association is not liable for actions of residents who do not fall in to one of the three listed categories above. You are reminded that I have instructed you to disregard the portions of the testimony of Tatyana Burda, Katie Dotts, Jessica Hotvedt, Annabelle Sky Farley, Blaine Svetich, David Silva, Russell Deming, and Kristy Morris that described their interactions with an individual shouting at them on the street, because it was not established that such individual was a member of the Board or an agent or employee of the HOA. I also instructed you to disregard the portion of Exhibit 3034 which discussed the threats made against Mr. and Mrs. Morris by Mr. Bird, for the same reason. That evidence has been stricken, and you are not to consider it in reaching your verdict.

         Although the Court ordinarily presumes that jurors will follow the Court's instructions with respect to stricken evidence, S. Pac. Co. v. Smith, 83 F.2d 451, 452 (9th Cir. 1936), the presumption is not absolute. In this case, it is exceedingly unlikely that the jury was actually able to set aside the testimony of nine witnesses regarding threats they received from third parties. Moreover, Ms. Morris' testimony regarding Mr. Bird's “death threat” and the impact it had on her undoubtedly remained in the mind of the jury, despite the Court's instruction.

         The unfair prejudice suffered by the Homeowners Association was compounded by the fact that Plaintiffs' characterization of Mr. Bird's statements as a “death threat” is an embellishment. The Court reviewed Plaintiffs' proposed exhibit 1005, which is a recording of a conversation between Mr. Morris and Mr. Bird, in which Mr. Bird allegedly threatened to kill Mr. Morris. Mr. Bird's statements, as recorded, cannot be reasonably interpreted as a credible “death threat.”

         Thus, the jury, despite the Court's instructions, undoubtedly considered the threats made to the Plaintiffs and the Christmas program attendees in arriving at their verdict. Worse yet, the “death threat” that Plaintiffs referred to frequently early on in the trial was hyperbole. As a result of the unique circumstances in this case, Plaintiffs benefited (1) by improperly getting evidence regarding threats before the jury and (2) having that evidence excluded before the Homeowners Association could expose the hyperbole. This result is unjust.

         3. Plaintiffs Failed to Offer Sufficient Proof in Support of Their Fair Housing Act Claims

         A. 42 U.S.C. § 3604(b) Claim

         Section 3604(b) of the Fair Housing Act makes it unlawful to “discriminate against any person in the terms, conditions, or privileges of sale … of a dwelling, or in the provision of services or facilities in connection therewith, because of” that person's religion. To prove that the Homeowners Association violated section 3604(b), Plaintiffs were required to prove each of the following by a preponderance of the evidence:

1. They were qualified to purchase a home in the West Hayden Estates;
2. The Homeowners Association intentionally discriminated against Plaintiffs' during the process of purchasing their home or after its purchase; and
3. The discrimination was, at least in part, due to Plaintiffs' religious beliefs or practices.

         First, Plaintiffs failed during the trial to offer proof upon which a reasonable jury could conclude that the Homeowners Association intentionally discriminated against Plaintiffs. To reiterate, the January 2015 Letter, and the circumstances under which it was drafted and sent, do not support the conclusion that the Homeowners Association intended to discriminate against Plaintiffs. To the contrary, in an effort to be responsive to Plaintiffs' demand for a quick ...


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