-WMC Angstman et al v. Carlsbad Seapointe Resort L.P. et al, No. 3:2011cv00062 - Document 20 (S.D. Cal. 2011)
Court Description: ORDER Granting in Part and Denying in Part Defendants' 9 Motion to Dismiss. Defendants' motion to dismiss plaintiffs' FHA and FEHA causes of action with prejudice and negligence claim as it relates to the FHA and FEHA claims is gran ted. Defendants' motion to dismiss plaintiffs' Unruh Act claim and negligence claim as to the Unruh Act claim is denied. Defendants are required to answer plaintiffs' complaint within the time provided in the Federal Rules of Civil Procedure. Signed by Judge M. James Lorenz on 5/23/2011. (jer)
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-WMC Angstman et al v. Carlsbad Seapointe Resort L.P. et al Doc. 20 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 THOMAS ANGSTMAN; TRACEY ANGSTMAN; S.A., a minor, by and 12 through his GUARDIAN AD LITEM KRISTINE ANGSTMAN; S.A., a minor, 13 by and through her GUARDIAN AD LITEM KRISTINE ANGSTMAN 14 Plaintiffs, 15 v. 16 CARLSBAD SEAPOINT RESORT II, 17 L.P., et al., Defendants. 18 19 20 ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Civil No. 11cv62 L(WMc) ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS [doc. #9] Defendants move to dismiss this action. The motion has been fully briefed and considered 21 on the papers submitted and without oral argument pursuant to Civil Local Rule 7.1(d)(1). 22 1. Background 23 Plaintiffs are owners in a timeshare company which allows them to participate in a 24 vacation exchange system at affiliated resorts around the world. They booked a week-long stay 25 at the Carlsbad Seapointe Resort through defendant RCI, LLC. Prior to their arrival at the resort, 26 they were informed that the resort included an “adults only pool” but the parents nevertheless 27 arrived for their vacation stay with their two minor children. A separate pool for families with 28 children is available at the resort. The resort also prohibits unaccompanied children under the 11cv62 Dockets.Justia.com 1 age of 12 years from using any of the exercise rooms. 2 Plaintiffs allege that their entire stay at the resort resulted in extreme stress upon their 3 family because of the discriminatory rules and policies concerning the use of the adult pool and 4 weight room. In their complaint, plaintiffs allege causes of action for violation of (1) the Fair 5 Housing Act; (2) the California Fair Employment and Housing Act; (3) the California Unruh 6 Civil Rights Act; and (4) negligence. 7 Defendants move to dismiss the action arguing that a vacation time-share is not a 8 “dwelling” under the FHA or the FEHA, the policies at issue are not unreasonable, arbitrary or 9 invidious under the Unruh Act, and the negligence claim is derivative of the other causes of 10 action. 11 2. Legal Standard 12 A Rule 12(b)(6) motion tests the sufficiency of the complaint. Navarro v. Block, 250 13 F.3d 729, 732 (9th Cir. 2001). Dismissal pursuant to Rule 12(b)(6) is proper only where there is 14 either a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a 15 cognizable legal theory.” Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir .1988). 16 "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual 17 allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires 18 more than labels and conclusions, and a formulaic recitation of the elements of a cause of action 19 will not do. Factual allegations must be enough to raise a right to relief above the speculative 20 level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks, brackets 21 and citations omitted). In reviewing a motion to dismiss under Rule 12(b)(6), the court must 22 assume the truth of all factual allegations and must construe them in the light most favorable to 23 the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). 24 After accepting as true all non-conclusory allegations and drawing all reasonable 25 inferences in favor of the plaintiff, the Court must determine whether the complaint alleges a 26 plausible claim to relief. See Ashcroft v. Iqbal 129 S. Ct 1937, 1950 (2009) (quoting Bell Atl. 27 Corp. v. Twombly, 550 U.S. 544, 570 (2007)(A complaint cannot survive a motion to dismiss 28 unless it provides "sufficient factual matter, . . . to ‘state a claim to relief that is plausible on its 2 11cv62 1 face.’”). “A claim has facial plausibility when the plaintiff pleads factual content that allows the 2 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 3 Iqbal at 1949. In determining facial plausibility, whether a complaint states a plausible claim is a 4 “context-specific task that requires the reviewing court to draw on its judicial experience and 5 common sense.” Id. at 1950. 6 In addition to factual insufficiency, a complaint is also subject to dismissal under Rule 7 12(b)(6) where it lacks a cognizable legal theory, Balistreri, 901 F.2d at 699, or where the 8 allegations on their face “show that relief is barred” for some legal reason, Jones v. Bock, 549 9 U.S. 199, 215 (2007). Thus, a claim may be dismiss under Federal Rule of Civil Procedure 10 12(b)(6) if on its face there appears some legal impediment to the claim. Jones, 549 U.S. at 215. 11 If the Court dismisses the complaint, it must then decide whether to grant leave to amend. 12 The Ninth Circuit has “repeatedly held that a district court should grant leave to amend even if 13 no request to amend the pleading was made, unless it determines that the pleading could not 14 possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 15 2000) (citations and internal quotation marks omitted). 16 3. Fair Housing Act 17 Defendants argue that the complaint does not set forth a claim for relief under the FHA 18 because a vacation timeshare arrangement as pleaded is not a dwelling as required under the 19 statute. The Court concurs. 20 Section 3604(b) of the FHA prohibits discrimination “against any person in the terms, 21 conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities 22 in connection therewith, because of race, color, religion, sex, familial status, or national origin.” 23 42 U.S.C. § 3604(b) (emphasis added) The regulations implementing the FHA further provide 24 that it is unlawful to “limit” the use of “privileges, services, or facilities associated with a 25 dwelling because . . . of familial status. . . . ” 24 C.F.R. § 100.65(b)(4). “Familial status” is 26 defined as “one or more individuals” under the age of 18 being domiciled with a parent or 27 another person having legal custody of those individuals, or with the designee of such parent of 28 person having legal custody, with the written permission of such parent or other person. 42 3 11cv62 1 U.S.C. § 3602(k). The federal FHA broadly applies to all public and private sales and rentals of 2 "dwellings" i.e., any building, structure or portion thereof occupied, or intended for occupancy, 3 as a residence. 42 USC § 3602(b)(emphasis added). It thus prohibits "familial status" 4 discrimination in ordinary housing rentals but not a hotel, motel or resort that is not occupied or 5 intended for occupancy as a residence. See e.g., United States v. Warwick Mobile Homes Estates, 6 Inc. 537 F2d 1148, 1149 (4th Cir. 1976); Patel v. Holley House Motels 483 F. Supp. 374, 381 7 (S.D. Ala. 1979) (small commercial motel not occupied as a residence, not a "dwelling" subject 8 to FHA). 9 Plaintiffs argue that the Preamble to HUD and a single case Louisiana ACORN Fair 10 Housing v. Quarter House, Oak Ridge Park, Inc., 952 F. Supp 352 (E.D. La. 1997) supports 11 finding that their timeshare is subject to the FHA. 12 The Louisiana ACORN case involved the sale of timeshare units. In considering whether 13 the FHA was applicable to the timeshares at issue, the court first looked to the Preamble to 14 Regulations issued in 1988 by HUD that stated that § 3602 was “‘broad enough to cover each of the 15 types of dwellings enumerated in the proposed rule: mobile home parks, trailer courts, condominiums, 16 cooperatives, and timesharing properties.’ Preamble I, 24 C.F.R. Ch. 1, Subch. A, App. I, 54 Fed. Reg. 17 3232, 3238 (Jan. 23, 1989).” Id. at 358. Although the court noted that the term “dwelling” was broad 18 enough to be construed to include timeshare properties under the Preamble, it was necessary to further 19 consider specific facts in making a determination of whether timeshares were dwellings. 20 After reviewing case law that addressed whether certain residential arrangements are considered 21 dwellings within the FHA., the court set forth the facts that allowed it to find that the timeshare units at 22 issue fell within the definition of “dwelling” under the FHA: 23 Here, purchasers of a Quarter House unit do not purchase a one night stay at a motel but instead possess the right to return every year to the same residential unit until 2032. There is no limit on the number of weeks in a unit that a Quarter House resident can purchase, and like any other property owner, Quarter House residents pay a mortgage and taxes on their property. 24 25 26 Id. at 359. 27 Although plaintiffs would like to read the Louisiana ACORN case as requiring the Court 28 to find their timeshare arrangement a “dwelling” within the meaning of the FHA, it merely 4 11cv62 1 points out that under certain specific factual circumstances, a timeshare may fall within FHA. 2 But just as the Louisiana ACORN court did, other courts considering whether a residential 3 arrangement is “dwelling” for purposes of FHA look to whether the arrangement is one to which 4 a person intends to return, as distinguished from place of temporary sojourn or a transient visit. 5 There has been no case presented or found where the FHA was applied in the context of non6 resident hotels and resorts such as the timeshare arrangement plaintiffs own here. 7 Although the FHA must be interpreted broadly to effectuate its purposes, and the statute 8 represents a "strong national commitment to promote integrated housing." Linmark Associates, 9 Inc. v. Township of Willingboro, 431 U.S. 85, 95 (1977), applying the FHA to a vacation 10 timeshare situation such as alleged here is neither reasonable or legally defensible. To construe 11 the FHA concept of “dwelling” to encompass a vacation timeshare where the plaintiffs do not 12 own or pay taxes on the property or stay at the resort for an extended period of time, or consider 13 the week-long stay to be anything other than a vacation accommodation, is to stretch the term 14 “dwelling” far beyond the statute’s intent. Given the facts of this case as pleaded by plaintiffs, 15 this is not the type of situation to expand the notion of dwelling to encompass their claim. 16 Because the FHA prohibits discrimination “against any person in the terms, conditions, or 17 privileges of sale or rental of a dwelling” and a vacation timeshare arrangement is not a dwelling 18 as defined in the statute, plaintiffs have failed to state a claim under Federal Rule of Civil 19 Procedure 12(b)(6). Further, because plaintiffs cannot cure this deficiency, the FHA will be 20 dismissed with prejudice. 21 4. Fair Employment and Housing Act 22 FEHA, Government Code § 12995, is part of California's statutory scheme to ensure fair 23 employment and housing practices. It is unlawful under FEHA discriminate in housing 24 accommodations because of familial status which is what plaintiffs allege in this cause of action. 25 FEHA defines a “housing accommodation” as “any building, structure, or portion thereof 26 that is occupied as, or intended for occupancy as, a residence by one or more families.” CAL. 27 GOV. CODE § 12927(d)(emphasis added). California courts rely on federal housing 28 discrimination laws to interpret analogous provisions of California Fair Employment and 5 11cv62 1 Housing Act. § 12955. 2 Like a “dwelling” under the FHA, a “housing accommodation” under FEHA does not 3 include a timeshare resort that is occupied for a temporary vacation stay. Because the FEHA 4 claim on its face shows that relief is unavailable under the facts pleaded, the Court will dismiss 5 with prejudice plaintiffs’ FEHA claim for failing to statute a claim. 6 5. UNRUH Unruh Civil Rights Act, Civil Code section 51 et seq. 7 Unlike FHA or FEHA, the Unruh Act is applicable to “all business establishments of 8 every kind whatsoever.” CIV. CODE 51(b). A timeshare arrangement is a business within the 9 provisions of the Unruh Civil Rights Act. 10 Further, the Unruh Act is to be given a liberal construction with a view to effectuating its 11 purposes. Sisemore v. Master Financial, Inc,. 60 Cal. Rptr.3d 719 (Cal. Ct. App. 2007) But “the 12 Unruh Act does not entirely prohibit businesses from drawing distinctions on the basis of the 13 protected classifications or personal characteristics; rather, ‘[t]he objective of the Act is to 14 prohibit businesses from engaging in unreasonable, arbitrary or invidious discrimination.” Howe 15 v. Bank of America N.A., 179 Cal. App.4th 1443, 1450 (2009)(quoting Sunrise Country Club 16 Assn. v. Proud190 Cal. App.3d 377, 381 (1987)). “[C]ertain types of discrimination have been 17 denominated ‘reasonable’ and, therefore, not arbitrary.” Id. (quoting Koire v. Metro Car Wash, 18 40 Cal.3d 24, 30 (1985). 19 Defendants argue the Unruh Act claim must be dismissed because the policies and rules 20 at issue here are neither unreasonable, arbitrary or invidious. Although California courts have 21 concluded that reasonable restrictions may be put in place so long as the restrictions are 22 rationally related to the services performed and the facilities provided, whether the policies in 23 this case are reasonable, not arbitrary or not invidious under the Unruh Act is a question that 24 cannot be addressed in a motion to dismiss. Twombly, 550 U.S. at 556 (“a well-pleaded 25 complaint may proceed even if it strikes a savvy judge that actual proof of those facts is 26 improbable, and ‘that a recovery is very remote and unlikely.’”) Here, plaintiffs have 27 appropriately pleaded a Unruh claim. 28 / / / 6 11cv62 1 6. Negligence 2 Plaintiffs’ negligence claim is premised upon defendants’ alleged failure to hire, traun, 3 supervise or discipline or terminate employees who failed to comply with the requirements of 4 state and federal fair housing laws. As defendants argue, the negligence claim is derivative of the 5 other causes of action in this case. Because plaintiffs fail to state a claim under the FHA or the 6 FEHA, the negligence claim based upon these statutes must fail. But as discussed above, as 7 unlikely as it may be that plaintiffs can prove an Unruh Act violation, they have adequately 8 stated a claim under Federal Rules of Civil Procedure 8 and 12(b)(6). Accordingly, the 9 negligence claim survives but only as to plaintiffs’ Unruh Act claim. 10 7. Conclusion 11 Based on the foregoing, IT IS ORDERED: 12 1. Granting defendants’ motion to dismiss plaintiffs’ FHA and FEHA causes of 13 action with prejudice and negligence claim as it relates to the FHA and FEHA claims; 14 2. Denying defendants’ motion to dismiss plaintiffs’ Unruh Act claim and negligence 15 claim as to the Unruh Act claim; and 16 3. Requiring defendants to answer plaintiffs’ complaint within the time provided in 17 the Federal Rules of Civil Procedure. 18 IT IS SO ORDERED. 19 DATED: May 23, 2011 20 21 M. James Lorenz United States District Court Judge 22 COPY TO: 23 HON. WILLIAM McCURINE, JR. UNITED STATES MAGISTRATE JUDGE 24 25 ALL PARTIES/COUNSEL 26 27 28 7 11cv62
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