Housing Discrimination Owner Defendants Vicariously Liable, in Source-of-Income Discrimination Case, for Acts of Real Estate Agent, Court Holds

In Newson v. Vivaldi Real Estate Ltd., No. 452625/2022, 2023 WL 8846564 (N.Y. Sup Ct, New York County Dec. 21, 2023), the court denied defendants’ motion to reargue/for reconsideration of the court’s denial of defendants’ motion to dismiss plaintiff’s claim of housing discrimination, based on lawful source of income, under the New York City Human Rights Law.

The court summarized the facts and procedural history as follows:

The Complaint alleges that Plaintiff, who was eligible for housing vouchers through a program administered by New York City HIV/AIDS Services Administration (“HASA”), saw a rental listing for the Unit Owners’ Brooklyn apartment on Zillow. He requested an application to rent the apartment through Zillow’s contact form, at which time he asked whether the listing would accept HASA vouchers. The following day, he received an email from Kathy Woo (“Woo”), a real estate agent with Defendant Vivaldi Real Estate Ltd. (“Vivaldi”). She wrote: “To the bet [sic] of my knowledge, the building is not approved to receive any housing assistance vouchers.” The Complaint alleges that Woo never subsequently contacted Plaintiff to inform him that he could rent the apartment or to otherwise assist him with his inquiry or application. Plaintiff did not apply to rent the apartment or further communicate with Woo or anyone else regarding the apartment. Plaintiff commenced this action alleging violations of the City HRL’s prohibition against housing discrimination based on source of income. He asserts separate causes of action against Vivaldi and the Unit Owners. The cause of action against the Unit Owners does not allege that the Unit Owners themselves engaged in discriminatory conduct, but rather that they “are vicariously liable for the discriminatory acts of the agents Vivaldi/Kathy Woo.”

The owner defendants moved to dismiss the complaint. The court denied their motion, finding that the complaint sufficiently pleads facts alleging a cause of action under New York City Administrative Code § 8-107(5) by alleging that Woo represented to Plaintiff that the apartment could not be rented to someone using HASA subsidies. The owner defendants also argued that they cannot be held responsible for Woo’s conduct under § 8-107(5)(a), since this section does not bind the owners for the agent’s conduct, and that the NYC Human Rights Law imposes vicarious liability on employers only.

In the present motion, the owner defendants move to reargue the decision to the extent it found that they could be held vicariously liable for Woo’s actions, arguing that this finding is contrary to the express language of § 8-107(5)(a).

Plaintiff, in opposition, argues that housing discrimination claims are tort claims, to which traditional vicarious liability principles apply.

After reviewing the text of the pertinent law, the court agreed with the plaintiff, explaining:

Section 8-107(5)(a) applies to “owners . . . or any agent . . . thereof.” It is well established that, under common law, principals may be held vicariously liable in tort for acts of their agents acting within the scope of their authority (Bigio v Coca-Cola Co., 675 F3d 163, 175 [2d Cir 2012], citing Osipoff v City of New York, 286 NY 422 [1941]; see also News Am. Mktg. v Lepage Bakeries, Inc., 16 AD3d 146, 148 [1st Dept 2005]).

“An action for housing discrimination is, in effect, a tort action, and ordinary tort-related vicarious liability rules apply. These principles provide that liability generally flows from the agent to the principal” (Keith Short & Fair Hous. Justice Ctr. v Manhattan Apts., Inc., 916 F Supp 2d 375, 399 [SD NY 2012] [citing Meyer, 537 US at 285]).

The Court finds that the City Council intended for § 8-107(5)(a) to incorporate these common law principles such that housing owners can be held liable for an agent’s acts performed within their scope of authority. This interpretation is consistent with the requirement that the City HRL be construed “broadly in favor of discrimination plaintiffs, to the extent that such a construction is reasonably possible” (Albunio v City of New York, 16 NY3d 472, 477 [2011]). Likewise, given that there is substantial identity between the language and purposes of the City HRL and the Fair Housing Act (Stalker v Stewart Tenants Corp., 93 AD3d 550, 551-552 [1st Dept 2012], citing Sayeh v 66 Madison Ave Apt. Corp., 73 AD3d 459, 461 [1st Dept 2010], Mitchell v Shane, 350 F3d 39, 47 n 4 [2d Cir 2003]), and that the City HRL must be “assessed under more liberal standards, going beyond the counterpart state or federal civil rights laws (Bennett v Time Warner Cable, Inc., 138 AD3d 598, 599 [1st Dept 2016]), a finding that the City HRL does not provide for vicarious liability would render it narrower than its federal counterpart, and therefore would be at odds with the statute’s uniquely broad and remedial purposes.

Based on this, the court denied defendants’ motion for leave to reargue.

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