ATTORNEY FOR APPELLANT: ATTORNEY FOR APPELLEES:
JACQUELYN THOMPSON MARK E. SPITZER
Indiana Civil Rights Commission BROWNE SPITZER HERRIMAN
Indianapolis, Indiana STEPHENSON HOLDEREAD &
SUPREME COURT OF INDIANA
STATE OF INDIANA, )
CIVIL RIGHTS COMMISSION, )
Appellant-Plaintiff, ) Supreme Court Cause Number
COUNTY LINE PARK, INC., ) Court of Appeals Cause Number
PAUL D. FOX and CAROLYN FOX, ) 27A02-9901-CV-29
APPEAL FROM THE GRANT SUPERIOR COURT NO. 3
The Honorable Natalie Conn, Judge
Cause No. 27D03-9803-CP-91
ON PETITION TO TRANSFER
November 29, 2000
Under the Indiana Fair Housing Act, it is unlawful to discriminate based on
familial status. The Act defines familial status in part as a parent
or custodian who is domiciled with an individual under the age of eighteen.
We conclude that the Act also protects families living with more than
one individual under the age of eighteen.
Factual and Procedural History
In December 1996, James and Martha Cain purchased a three-bedroom mobile home located
in a mobile home park owned and operated by County Line Park, Inc.
(County Line). The Cains submitted a written application to County Line to
rent a lot in the park. The application indicated that in addition
to the Cains their four children, ages sixteen, nine, six, and two, would
also live in the home. Paul Fox, president of County Line, responded
to the Cains that he was denying their application because of County Lines
long-standing policy of not renting mobile home lots to families with more than
In February 1997, James Cain filed an administrative complaint with the Indiana Civil
Rights Commission (Commission) and the U.S. Department of Housing and Urban Development (HUD).
Initially the complaint named County Line and Paul Fox as defendants and
alleged discrimination in housing based on familial status and the disability of one
of the Cains children. The complaint was later amended to include Martha
Cain as an additional plaintiff and Carolyn Fox, secretary of County Line, as
an additional defendant. The Commission conducted an investigation and in January 1998 issued
a notice that concluded there was reasonable cause to believe discrimination based on
familial status had occurred in violation of the Indiana Fair Housing Act (Act),
Ind. Code §§ 22-9.5-1-1 et seq., and the federal Fair Housing Act (FHA),
42 U.S.C. §§ 3601-3631. The notice did not find reasonable cause with
respect to the disability of one of the Cains children. County Line
and the Foxes (collectively referred to as Landowners) then elected to have the
merits of the complaint tried in a civil action rather than by an
administrative law judge.
In March 1998, the Commission filed a complaint in Grant Superior Court on
its own behalf and on behalf of James and Martha Cain alleging that
Landowners had violated the Act by refusing to rent the mobile home lot
to the Cains based upon its two children per mobile home occupancy limit.
In response, Landowners filed a motion to dismiss the complaint under Indiana
Trial Rule 12(B)(6) contending that although the Act prohibits discrimination against families in
general, it does not provide protection to large families such as the Cains.
Landowners also contended that under the Act, the Foxes, as corporate officers
and shareholders of County Line, could not be sued in their individual capacities.
Landowners sought attorneys fees pursuant to the prevailing party provision of the Act.
The trial court granted the motion to dismiss and awarded attorneys fees
to Landowners of $350. The Commission appealed. The Court of Appeals
affirmed the judgment and remanded the case to the trial court for a
determination of appellate attorneys fees.
Civil Rights Commn v. County Line Park,
Inc., 718 N.E.2d 768 (Ind. Ct. App. 1999). Having previously granted transfer,
we now reverse the judgment of the trial court.
The Act makes it unlawful to refuse to sell or to rent after
the making of a bona fide offer, refuse to negotiate for the sale
or rental of, or otherwise make unavailable or deny a dwelling to any
person because of race, color, religion, sex, familial status, handicap, or national origin.
Ind. Code § 22-9.5-5-1(a) (emphasis added). A discriminatory act based upon
familial status is committed if the person who is the subject of the
(2) domiciled with an individual younger than eighteen (18) years of age
in regard to whom the person:
(A) is the parent or legal custodian; or
(B) has the written permission of the parent or legal custodian for domicile
with that person; or
(3) in the process of obtaining legal custody of an individual younger
than 18 years of age.
Ind. Code § 22-9.5-1-2 (emphasis added).II.
The Act borrows heavily from the FHA, with many parallel provisions and similar
language. In fact, the first section of the Act declares that its
purpose is to provide rights and remedies substantially equivalent to those granted under
federal law. Ind. Code § 22-9.5-1-1. In relevant part, the FHA
provides: Familial status means one or more individuals (who have not attained
the age of 18 years) being domiciled with (1) a parent or another
person having legal custody . . . . 42 U.S.C. § 3602(k)
(emphasis added). Seizing on the an individual language of the Act in
contrast to the one or more individuals language in the FHA and relying
on principles of statutory construction, the Court of Appeals reasoned that the Act
should be read more narrowly than its federal counterpart. County Line, 718
N.E.2d at 772. We disagree with our colleagues on the Court of
The goal of statutory construction is to determine, give effect to, and implement
the intent of the legislature. Collier v. Collier, 702 N.E.2d 351, 354
(Ind. 1998). The statute is examined as a whole, and it is
often necessary to avoid excessive reliance on a strict literal meaning or the
selective reading of individual words. Id. The legislature is presumed to
have intended the language used in the statute to be applied logically and
not to bring about an unjust or absurd result. Riley v. State,
711 N.E.2d 489, 495 (Ind. 1999). Applying these principles to the Act,
we must conclude that limiting protection to families living with only an individual
under the age of eighteen would produce a result we do not believe
the legislature could have intended. For example, Landowners argue that numerical occupancy
restrictions are permissible based on factors such as the number and size of
sleeping areas or bedrooms and the overall size of the dwelling unit.
We have no problem with this general proposition. Indeed the Act specifically
provides that it does not affect a reasonable local or state restriction on
the maximum number of occupants permitted to occupy a dwelling . . .
. Ind. Code § 22-9.5-3-6(a). However, to read the Act as Landowners
insist would mean that it protects from discrimination families comprised of four adults
and one child but not families comprised of two adults and three children.
And this is so even though the numbers are the same.
Further, in construing Indiana civil rights law we look to federal case law
for guidance. Indiana Civil Rights Commn v. Alder, 714 N.E.2d 632, 636
(Ind. 1999). Federal courts as well as HUD have held that occupancy
limitations based on the number of children as opposed to reasonable spatial considerations
violate the FHA. See HUD v. Kelly, 3 F.3d 951, 952 (6th
Cir. 1993) (holding that apartment owners one child per bedroom policy violated the
familial status provisions of the FHA); HUD v. Sams, Fair Hous.-Fair Lend. (P-H)
¶ 25,069 (HUD A.L.J. March 11, 1993), affd without opinion, 76 F.3d 375
(4th Cir. 1996) (holding that landlords refusal to rent a house to
a family because it had too many children constituted familial status discrimination in
violation of the FHA). We view the federal approach as appropriate here.
Thus, despite the difference in wording, the Act should not be interpreted
more narrowly than the FHA. Accordingly, under the Act families living with
one or more individuals under the age of eighteen are entitled to protection
from familial status discrimination.
We turn then to the question of whether the trial court properly granted
Landowners motion to dismiss the Commissions complaint. In reviewing a 12(B)(6) motion
to dismiss, we look at the complaint in the light most favorable to
the plaintiff, with every inference drawn in its favor, to determine if there
is any set of allegations under which the plaintiff could be granted relief.
Indiana Civil Rights Commn v. Indianapolis Newspapers, Inc., 716 N.E.2d 943, 945
(Ind. 1999); Ratliff v. Cohn, 693 N.E.2d 530, 534 (Ind. 1998); Cram v.
Howell, 680 N.E.2d 1096, 1096 (Ind. 1997). A dismissal under Trial Rule
12(B)(6) is improper unless it appears to a certainty that the plaintiff would
not be entitled to relief under any set of facts. Thomson Consumer
Elecs., Inc. v. Wabash Valley Refuse Removal, Inc., 682 N.E.2d 792, 793 (Ind.
1997). Dismissals under Trial Rule 12(B)(6) are rarely appropriate. Obremski v.
Henderson, 497 N.E.2d 909, 910 (Ind. 1986).
There are two theories by which a plaintiff may establish a prima facie
case of housing discrimination: disparate treatment and disparate impact. Snyder v.
Barry Realty, Inc., 953 F. Supp. 217, 219 (N.D. Ill. 1995). The
two follow distinct evidentiary paths. To establish a prima facie case of
disparate treatment, a plaintiff must prove, by either direct or circumstantial evidence, that
the defendant intentionally discriminated against the plaintiff based on familial status. Kormoczy
v. HUD, 53 F.3d 821, 824 (7th Cir. 1995). If the plaintiff
succeeds, then the defendant must prove that it would have made the same
decision absent any reliance on familial status. Id. By contrast, to
establish a prima facie case of disparate impact, a plaintiff must prove that
the defendants actions had a discriminatory effect. United States v. Badgett, 976
F.2d 1176, 1178 (8th Cir. 1992). If the plaintiff succeeds, then the burden
shifts to the defendant to articulate a legitimate, non-discriminatory reason for its action.
Id. If the defendant satisfies this burden, then the plaintiff has
the opportunity to prove that the legitimate reasons asserted by the defendant are
in fact mere pretext. Id. In order to survive a challenge
under Trial Rule 12(B)(6) for disparate treatment, a plaintiff need only allege intentional
discrimination. See Kormoczy, 53 F.3d at 824. Likewise, in order to
survive a challenge under Trial Rule 12(B)(6) for disparate impact, a plaintiff need
only allege discriminatory effect. See Snyder, 953 F.Supp. at 219.
In the case before us, the Commission alleged in its complaint that the
Cains submitted a written application to County Line to rent a mobile home
lot; the mobile home would accommodate two adults and four children under the
age of eighteen; County Line had a two children per mobile home occupancy
limit regardless of the number of bedrooms or square footage in the mobile
home; and County Line relied on this policy to deny the Cains application
to rent the mobile home lot. R. at 6-11. It is
clear that at the very least the allegations in the Commissions complaint support
a claim for disparate treatment, namely: that County Line intentionally discriminated against the
Cains based on familial status.
The Commission also sued Paul and Carolyn Fox in their individual capacities as
shareholders and corporate officers of County Line. Landowners contend the trial court
properly granted its 12(B)(6) motion to dismiss as to the Foxes because it
is hornbook corporate law that officers and shareholders are generally not personally liable
for the acts or contractual obligations of the corporation. Brief of Appellees
at 13. It is true that an officer of a corporation is
generally not personally liable for the torts of the corporation or other officers
or agents merely because of her office. Hanson v. St. Lukes United
Methodist Church, 682 N.E.2d 1314, 1320 (Ind. Ct. App. 1997), affd in part,
vacated in part on other grounds by 704 N.E.2d 1020 (Ind. 1998).
However, an officer is personally liable for the torts in which she has
participated or which she has authorized or directed. Palace Bar, Inc. v.
Fearnot, 376 N.E.2d 159, 169 (Ind. Ct. App. 1978), vacated on other grounds
by 381 N.E.2d 858 (Ind. 1978); Gable v. Curtis, 673 N.E.2d 805, 809
(Ind. Ct. App. 1996) (It is well-settled that a corporate officer cannot escape
liability for fraud by claiming that he acted on behalf of the corporation
when that corporate officer personally participated in the fraud.); Ind. Code § 23-1-26-3(b)
[the Business Corporations Act] (Unless otherwise provided in the articles of incorporation, a
shareholder of a corporation is not personally liable for the acts or debts
of the corporation except that the shareholder may become personally liable by reason
of the shareholders own acts or conduct.); cf. Winkler v. V.G. Reed &
Sons, Inc., 638 N.E.2d 1228, 1236 n.7 (Ind. 1994) (holding that corporate officer
can be personally liable for inducing the corporation to breach its contract if
he is acting outside the scope of his official duties or for personal
gain). These principles apply also to cases involving alleged housing discrimination.
See, e.g., City of Chicago v. Matchmaker Real Estate Sales Ctr., Inc., 982
F.2d 1086, 1098 (7th Cir. 1992) (holding that sole owner/chief executive officer of
corporation was personally liable for violating the FHA because he supervised the day-to-day
operations of the corporation and its agents); Moss v. Ole S. Real Estate,
Inc., 933 F.2d 1300, 1312 (5th Cir. 1991) (holding that the magistrate erred
in granting a directed verdict in favor of the officers of the corporation
because if the jury found that the officers directly participated in or authorized
the discrimination in the sale of the home, they could be held personally
liable); Clark v. Universal Builders, Inc., 501 F.2d 324, 340 (7th Cir. 1974)
(permitting complaint under the Civil Rights Act not only against the officers of
the closely held corporation, but also against the shareholders because they were on
constructive notice of the [discriminatory housing] action and indeed were active participants in
it since its inception.).
The question here is whether the allegations in the Commissions complaint, naming Paul
and Carolyn Fox in their individual capacities as officers and shareholders of County
Line, are sufficient to withstand a 12(B)(6) motion to dismiss. We conclude
that they are sufficient. To support its request to hold the Foxes
personally liable, the Commission alleged the following: Paul Fox and Carolyn Fox, husband
and wife, are President and Secretary, respectively, of County Line Park, Inc., through
which they own and operate [County Line], and that Paul Fox wrote the
Cains stating that he was denying their application to rent the mobile home
lot because it has been policy of County Line Park for 25 years
not to accept applications w/more [sic] than 2 children . . . .
R. at 6-7. It is clear that the Commission has stated
facts sufficient to allege that Paul Fox directly participated in an act of
housing discrimination. Although the Commission did not specifically refer to Carolyn Fox
by name in the body of the complaint, she was joined as a
defendant in this action, and the complaint does allege: [t]he actions of
the defendants in denying [the Cains] their right to fair housing and equal
housing opportunity were intentional and in wanton and reckless disregard of the Indiana
Fair Housing Act and [the two children per mobile home occupancy limit] constitute[s]
[a] pattern or practice by the defendants of resistance to the full enjoyment
of rights secured by the [Act]. R. at 11, 12 (emphasis added).
With regard to any defendant, whether the Commission can carry its burden
of proof at trial remains to be seen. However, at this stage
of the proceedings, looking at the complaint in the light most favorable to
the Commission with every inference drawn in its favor, we must conclude that
the allegations in the Commissions complaint entitle it to relief against all defendants
for discrimination in housing based on familial status as defined by the Act.
The judgment of the trial court is reversed and this cause is remanded
for further proceedings.
SHEPARD, C.J, and SULLIVAN and BOEHM, JJ., concur.
DICKSON, J., concurs except as to the reversal of the order dismissing the
action as to defendant Carolyn Fox, which he would affirm.
Indiana Code § 22-9.5-6-12(a) provides, A complainant, a respondent, or an
aggrieved person on whose behalf the complaint was filed may elect to have
the claims asserted in a finding of reasonable cause decided in a civil
action . . . .