StateGoneCrazy

14Aug/140

The Mother of All Frivolous Discrimination Lawsuits – State of California and Fair Housing Council Shakedown Newport Property Owner

A Chronological History of this ridiculously frivolous and failed shakedown attempt by the State and Fair Housing Council of Orange County as reported in the LA Times and the Orange County Register.

Rental ad Twisted into Battle over Bias - LA Times June 2007

Landlord Rents Trouble - LA Times Nov. 2007

Unfair Fight - Orange County Register 3-28-08

O.C. Fair Housing and State Shakedown Newport Property Owner - Orange County Register 4-1-08

Landlord on Hook for up to $44,000 - Orange County Register 4-29-09

Profiting from Persecution - Orange County Register 5-3-09

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The Shakedown

In November 2006, the State of California, Department of Fair Employment & Housing (DFEH) dispatched an employee of the DFEH located in Los Angeles to hand serve me with a formal "Accusation" of housing discrimination after receiving a complaint from the Fair Housing Council of Orange County (FHCOC)(a private, non-profit, HUD funded corporation) in July, 2006.

DFEH Accusation of Discrimination

Fair Housing Council Discrimination Complaint

The FHCOC claimed that their public funded, private, 501c non-profit corporation had been damaged when it read, "well suited for 1 or 2 professional adults..." in the body of an 'Apt For Rent' Craigslist ad that I had posted. My rental ad was for an attached 450 sq. ft. mother in law unit located in the back of my 1,150 sq ft home in Newport Beach. No potential renter complained and the FHCOC did not issue any advance warning to me even though my telephone number was listed right in the ad. The ad was posted on Craigslist for no more than 10 days.

My Craigslist Apt. For Rent Ad

Keep in mind, this was a grandfathered 450 sq. ft. utility apartment in the back of my 1938, back-split, legal, non-conforming duplex. One of the rooms was once 1/2 of the original garage. We shared the same mailbox, laundry, cable, hot water tank and a very small, one car garage. There was a door that separated my unit and the rental as the home could also converted back to a single family dwelling. This was my only rental unit which I received $1,950 per month in rent. (It wasn't that the apartment was anything special. The bedroom's measured no more than 7' x 9'. It had a 3' wide staircase which led upstairs to the apartment. There was no room for storage or anything other than small furniture. You couldn't even get a queen size mattress up the staircase. It also had a old Pullman kitchen, no dishwasher or other amenities. It did have a nice rooftop deck with a partial view of Newport Harbor and was located in a beautiful neighborhood on the Balboa Peninsula, 700' up from Newport Harbor on one side and 1 1/2 blocks to the ocean on the other side. And that's the only reason why I was able to rent the unit for $1,950 / month.

My 1150 sq. ft. duplex in Newport Beach

In a telephone interview with a 20 year, veteran reporter for the LA Times, Dana Parsons, the FHCOC's director of training, Joel Ibanez, claimed that -in his opinion- my phrase "... sort of implied..." an intent to discriminate against families with children and... "it leaned in that direction".

LA Times Article 11-6-07

The FHCOC's CEO and chief counsel, D. Elizabeth Pierson, esq. (AKA Elizabeth Martin, esq), claimed that my advertisement caused the FHCOC 'frustration of mission' and demanded I pay the FHCOC $4,000 plus agree to take 5 years of continuing landlord education classes through the FHCOC's own landlord training facilities at $250 per class. They also demanded that I admit that my ad was discriminatory and sign a 'confidentiality agreement'. They told me that I should just regard the payment as a 'donation' so I could write it off my taxes.

Upon receipt of the complaint, The State of California's Department of Fair Employment & Housing (DFEH) conducted a full investigation on me. After conducting several telephone interviews with my former tenants and neighbors, Lillianita Brumsfeld, Administrator for the DFEH, formally determined that there was no evidence of a 'history or practice of discrimination' by me, but claimed that my ad was still discriminatory 'on it's face' and that my true intention did not matter.

DFEH Evidence Summary Sheet - L. Brumfield, DFEH Investigator

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The DFEH files suit in O.C.Superior Court for Unlimited Damages

When I refused to pay up and sign a confidentiality agreement, the Chief Counsel for the DFEH, Paul Ramsey, esq. and State staff attorney, Ralph Tsong, esq., filed a formal civil discrimination lawsuit against me on behalf of the FHCOC in Orange County Superior Court seeking 'Unlimited Damages'. They also asked the court to require me to post fair housing posters (DFEH posters #164H and #164Hs) in both English and Spanish throughout my 450 sq.ft. mother in law unit.

state-of-california-v-bader Case #07CC12497

State v Bader Prayer for Relief

On advice from my counsel, I filed a cross complaint against both the State and Fair Housing Council alleging Civil Extortion, Abuse of Process and Filing a False Complaint.

The Judge rejected my cross-complaint under a SLAPP motion (Strategic Lawsuit Against Public Participation) filed by the DFEH and sanctioned me over $20,000. Basically, the Judge found that the DFEH and FHCOC had the free speech rights to sue me, but I didn't have the free speech right to sue them back.

DFEH SLAPP Motion

(As a side note: the original intent of the SLAPP statute is to stop a 'big guy' from cross suing a 'little guy' in an attempt to intimidate the little guy from going forward with a suit filed against the big guy. In my case, I was clearly the little guy being sued by the big guy, the State of California. And how the Judge determined that the State of California, has free speech rights is best left to legal scholars).

Still, the Judge told us that if we were to win at trial, I could get my costs and fees reimbursed.

The Judge, Andrew Banks, even told the DFEH attorney, Ralph Tsong, esq at that hearing, that he could literally read the phrase I used at least 3 different ways. Mr. Tsong could only read my ad as discriminatory.

So, I decided not to pay up and go forward and have a jury decide the issue. A 5 day jury trial was scheduled. (After all, they were suing me on their belief that I was somehow 'implying' discrimination, even though they already determined that I had no history or practice of discrimination. In fact, at the time the Complaint was filed against me, I was renting the apartment out to a family with 2 children under the age of 12. The DFEH even conducted a telephone interview with the renters).

After 8 long months of what I can only describe as unbelievable stress as I prepared for the trial of my life, Mr. Tsong suddenly and without any explanation 'dismissed' the case, 6 weeks before the trial. So, after months of threats if I didn't pay up, because this was what they described as a 'meritorious' case, the DFEH simply decided that they didn't want to face a jury and walked away. It was like it was some kind of 'bluff' as they kept demanding that I pay up right up to their dismissal.

When I went back to the Judge and asked to be reimbursed for the $10's of thousands of dollars I was out (not to mention the incredible amount of time I put into defending myself and the incredible emotional and physical stress I was subjected to), Judge Banks simply 'Denied' my motion.
(In the final hearing, Mr. Tsong, argued to the Judge not to award me any reimbursement for either the ten's of thousands of dollars I spent defending myself or for the 2 1/2 years of harassment I was subjected to by the State Department of Fair Employment & Housing.

At that hearing, the Judge told Mr. Tsong that he (Judge Andrew Banks) could literally read the phrase in question at least 3 different ways. Mr. Tsong said he could only read it one way and told the Judge that the fact that I did not ultimately rent the apartment to a family must have meant that my intention was to discriminate.)

Final_Hearing on Motion for Reimbursement Transcripts

Minute Order Denying Attorneys Fees

Brian Joseph, the investigative reporter for the Orange County Register, even called Judge Banks to see if he could get an explanation. Judge Banks refused to take his call. In this article, Brian Joseph reported that the FHCOC told the State to drop the case. I asked the attorney, Deborah Reisdorph, esq, why she dropped the case and she told me that the State decided to drop the case.

Landlord on hook for up to $44,000 Orange County Register 4-29-09

Judge Banks basically forced me to Appeal his decision. So, after another full year and thousands more I appealed his decision. The Court of Appeals sanctioned me over $15,000 for appealing Judge Banks' decision.

This most frivolous lawsuit waged by a couple of naive and unethical State employed attorney's - who had absolutely nothing to lose - cost me my business; my home of 14 years, $10's of thousands of dollars in fees and costs, my credit, and upended my personal life...for absolutely nothing.

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UNCLEAN HANDS AND FRADULENT ACTIVITY AT THE FAIR HOUSING COUNCIL OF ORANGE COUNTY

Shortly after the Orange County Register's, O.C. Fair Housing & State Shakedown Newport Property Owner editorial was published on 4-1-08, the FHCOC's Board of Directors apparently woke up.

At the bottom of that same editorial, he also reported that the FHCOC’s CEO, Pierson, changed the locks on the FHCOC to bar the board of directors from performing an internal investigation on her practices:

“…Ironically, for a group that so meticulously polices others' behavior, its officials have a hard time dealing respectfully with one another. Earlier this month, the Register reported the Fair Housing Council's executive officer was placed on administrative leave, but D. Elizabeth Pierson refused to acknowledge the action and even had the locks changed on the agency's office. Of course, legal action has followed…”

O.C. Fair Housing and State Shakedown Newport Property Owner - 4-1-08

The OC Register also published a subsequent article on Ms. Pierson's attempts to bar the Board of Directors from conducting an internal investigation on the FHCOC and Pierson's highly suspect, illegal, unethical and conflicts of interest activities at the FHCOC.

Pierson changes locks - OC Register, 3-04-08

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Fair Housing Council Investigated by HUD for Fraud:

In a FHCOC internal agency memo dated, February 8, 2008, that was filed with the Court, Ms. Pierson writes to her Board Of Directors regarding a Fraudulent Reporting practice the FHCOC had been regularly committing on HUD:

"I cautioned at the last Meeting January 30th that public documents such as Minutes should be carefully reviewed and the information limited to action taken. Now an agenda is out for public view that airs the dirty laundry. This is a direct threat to the stability of the agency, its standing in the community and our success in current litigation"
D. Elizabeth Pierson, Esq.

(As it turned out, HUD allowed the FHCOC to go back and revise the fraudulent reports with no penalty)
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In response to Pierson's refusal to allow the internal investigation to take place, the Board put Pierson on an 'unpaid leave of absence' alleging Abuse by the CEO.

Fair Housing CEO placed on upaid leave - OC Register 6-12-08

The Board of Directors also received an internal letter of complaint by a FHCOC staff attorney, Hani Bushra, esq. in which he alleges numerous 'conflicts of interest' scenarios conducted by Pierson. Bushra's letter to the Board of Directors document was obtained from Court documents filed once the lawsuit between Pierson and the FHCOC broke out.

Board Suing Pierson for blocking probe into misuse of funds - OC Register 3-12-08

An FHCOC Internal Complaint Against Ms. Pierson by staff attorney, Hani Bushra, esq

In retaliation, Pierson sued the FHCOC and Board of Directors for Discrimination, Unlawful Termination and 12 other causes of action.

Fair Housing CEO sues board - 5-5-08

Pierson vs FHCOC Case #30-2008-00103342 - 7-10-08

The FHCOC eventually prevailed in the lawsuit against Pierson.

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THE DFEH CONCILIATION CONFERENCE, aka THE SHAKEDOWN

At that conference which was held on June 5, 2007, I was escorted into a small conference room by two DFEH administrators, Lillianita Brumfeld & Belinda Brown..

Once the proceeding began, the lead administrator, Ms. Belinda Brown, read the Complaint and the Government Code Section 12955 (c) that I had allegedly violated. There was no court reporter or electronic recording device present in the room.

Anti-Discriminatory Advertising Government Code Section 12955 (c) states;

“It shall be unlawful for any person to make, print, or publish, or cause to be made, printed, or published any notice, statement, or advertisement, with respect to the sale or rental of a housing accommodation that indicates any preference, limitation, or discrimination based on race, color, religion, sex, sexual orientation, marital status, national origin, ancestry, familial status, source of income, or disability…”

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(Unknown to me at the time, Ms. Brown stopped reading after this first clause of the Code and did not read the following second clause attached to the Section which I discovered existed several months later. This second clause of the Code actually goes on to state)

“…or an intention to make that preference, limitation, or discrimination.”

(Note: This highly relevant omission infers that there must be situations where the ‘intent’ of a violator is relevant. Therefore, the Legislature must have attached this ‘intent’ phrase to address ambiguous cases - like mine - so as not to prosecute unintended violations that may be unwittingly posted by naive advertisers. Otherwise, what could possibly be the reason for the Legislative body attaching this second clause to the Government Code 12955?)

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After reading the Complaint and Statute to me, I was told that they (the two State administrators) had already predetermined that the 8 word phrase I used in the body of my ad ("Well suited for 1 or 2 professional adults") was a violation of the Statute even though Ms. Brumfeld had conducted a telephonic interview with a former tenant of mine, Darla Walters, who had a 16 year old daughter living with her in my mother-in-law unit. The Administrator had even interviewed a witness who happened to be renting the unit at the same time my Craigslist ad was running and who had 2 children under the age of 12 staying in the unit. She also told me that she found no evidence of a history or practice of discrimination.

DFEH Investigation Evidence-Summary

Regardless of the fact that I had no history of discrimination, I was told by Ms. Brown that the evidence

"might’ mitigate the damages, but would not vindicate me."

I then asked, “so, what does the Fair Housing Council want from me?”

I was then told that the FHCOC was demanding $4,000 to cover the ‘out-of-pocket’ expenses that they had purportedly spent conducting an online investigation on me and in mailing out (90) Fair Housing flyers into the community:

FHCOC Flyer Image

FHCOCFlyer
(clearly intended to bring in more discrimination business and not to educate the community)

I was also told that the FHCOC was demanding 5 years of continuing landlord education to be taken through their training facilities and at $250 per class additional cost to me.

I then asked the Administrator if I could have the FHCOC’s demand in writing and if I could see how they calculated their purported $4,000 in ‘out of pocket’ expenses.

I was told, “no, Mr. Bader, you can’t”.

I then asked why the aggrieved Complainant (The FHCOC) wasn’t present at the conference and was informed by Ms. Brown that, ‘they don’t have to attend’.

At that time, Ms. Brown asked me if I, “wanted to make a settlement offer?”

I replied, “what will happen if I choose not to make an offer?”

Ms. Brown explained, “then we will have to send the Complaint to Legal”.

Utterly confused I responded, “but I don’t discriminate and never have.”

Ms. Brown said, "it doesn't matter, your ad is a violation on it’s face."

Looking at Ms. Brown, I asked, "are you an attorney?"

She replied, "no, I am not.".

I then turned toward Ms. Brumfield and asked her if she was an attorney?

Like Ms. Brown, Ms. Brumfield replied, "no, I'm not."

Logically, I asked; well then, how is it that you two make the determination that my phrase is discriminatory?

Ms. Brown replied, "that's our responsibility, and we've determined the phrase you used violates the statute."

Then I asked; “well then, why did you ask me to produce documents and witnesses for my defense if you had already pre-determined that I was guilty?”

Ms. Brown replied; “We are required by Government Code to conduct the investigation.

Ms. Brown then added; “Mr. Bader, it could get very costly for you as you’ll probably have to hire an attorney and may have to make several time consuming trips up to Los Angeles for hearings.“

I then asked her; “well, can I at least have a look through the file? I’d like to see the Craigslist ad that I had placed several months ago?

“No, you may not, she answered, …that’s confidential.”

Holding back my frustration, I then said to the Administrator, “OK, I’ll offer one training class.”

With a surprised look on her face, Ms. Brown said, ‘that’s it…no money?” “No money," I echoed.

At that time, both Administrators picked up their files, asked me if I’d like a cup of coffee and left me alone in the room while they purportedly went to telephone the FHCOC with my offer.

Several minutes later they both returned. Before they had a chance to sit down I preempted them with the question, “well, do we have a deal?”

Ms. Brown appeared impatient with me and said, “no Mr. Bader, we don’t.

So, I asked; what's their counter? Ms. Brown explained; "there is no counter."

"No counter", I asked? "They don't have to counter," she answered.

Then she asked me; "would you like to up your offer?”

"Well then, I asked, I guess that means money?

She replied, “well, that’s typically what they want and would probably satisfy them.”

After a few more minutes of what I could only describe as a shakedown, I stood up and excused myself from the meeting.

As I was leaving I concluded with, “Thank you ladies, but I don’t think we’ll be doing a deal today.”