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Miller v. Brookside at Somerville, LLC

A-5757-06T3 (N.J. Super. App. Div. 2008) (Unpublished)

PUBLIC HOUSING; DISCRIMINATION — Use of credit checks by a housing authority does not constitute discrimination against individuals or classes of individuals because creditworthiness is an appropriate standard and, in fact, federal agencies recommend that credit checks be used as part of the tenant screening process.

A retiree, who was blind in one eye and who received federal retirement benefits and federal housing assistance, lived in a two-family house but needed to find a new residence when his landlord brought an eviction action. The retiree applied to rent an apartment in an apartment complex. The apartment complex used the same screening process for the retiree as was used for all applicants. The process involved the computation of a mathematical formula which included an applicant’s credit history, landlord-tenant history, income, and criminal background. A computer program calculated the score and indicated whether the applicant was accepted or declined. The retiree’s score fell below the threshold for acceptance and the apartment complex notified him that his application was denied. The retiree later learned that his credit score, which was conducted by a third party, was low and that there were three landlord-tenant lawsuits listed in the report.

The retiree sued the apartment complex claiming that it discriminated against him for his status as a recipient of federal housing assistance in violation of state anti-discrimination statutes. Prior to trial, the lower court granted the retiree’s request for a temporary restraining order which required the apartment complex to ensure that an apartment would remain available to him if he were to have prevailed on his claims. At trial, the retiree argued that the credit report obtained by the apartment complex was erroneous and misleading because unpaid medical expenses on the report amounted to only three hundred fifty dollars and because a reference to a child support obligation was to his son who shared the same name as him. The retiree also argued and that of the three landlord-tenant disputes which were reported, he was not a party to one, another was for the return of a security deposit in which he prevailed, and the third was for his landlord’s action for possession, which he did not dispute. He maintained that he was never evicted for non-payment of rent. The retiree also alleged that the apartment complex discriminated against him because it did not consider his federal housing assistance voucher in his application.

The apartment complex countered that roughly forty tenants who resided in the complex received federal housing assistance and that it re-evaluated the retiree’s application inclusive of his income from federal housing assistance, but that his score still fell short of the threshold for acceptance. After hearing arguments from both parties, the lower court did not render a decision on the merits of the retiree’s claims, but determined that the retiree was not likely to prevail in his claim. On that basis, it denied injunctive relief against the apartment complex. The lower court also vacated the temporary restraining order which required the apartment complex to reserve a rental unit for the retiree. The retiree appealed the lower court’s vacation of the temporary restraining order and its denial of injunctive relief.

On appeal, the Appellate Division pointed out that it was limiting its review to whether the lower court properly denied the retiree’s request for injunctive relief. It also pointed out that the purpose of injunctive relief was to prevent irreparable harm and that it was not to be ordered if the claims brought are unsettled or if the material facts are in question. The Court additionally pointed out that it was necessary to weigh the hardship that could ensue from the injunction. The Court noted that while it was not making a decision on the merits of the retiree claims, landlords were allowed to use a screening process, inclusive of creditworthiness, to determine whether an applicant is qualified to reside on its premises but were not allowed to discriminate on the basis of an applicant being a recipient of federal housing assistance.

The Court found that the lower court properly concluded that the apartment complex did not appear to have violated antidiscrimination statutes and that the retiree was not likely to prevail on his claims, finding no evidence that the retiree’s status as a recipient of federal housing assistance negatively influenced his application. It agreed that credit checks as a part of a screening process were not only allowed but recommended by federal agencies. The Court rejected the retiree’s argument that the apartment complex was obligated to look beyond the standardized credit score or to probe the validity of the third party that performed the credit check. It pointed out that if the retiree disputed the credit report issued by the third-party reporting agency, then he could have directly contested the third party report or joined it as a party to his action against the apartment complex. The Court, however, refused to examine the credit report’s accuracy or to ascertain how the prior landlord-tenant disputes which appeared in the report might have affected the retiree’s final score. Additionally the Court found that the inclusion of the landlord-tenant disputes did not violate public policy as argued by the retiree. The retiree’s amended claims under federal housing law and antidiscrimination law based on disability were found by the Court to lack adequate support and did not establish that the apartment complex failed to provide accommodations. Also, the retiree never indicated what the accommodations could have been. Thus, the Court affirmed the lower court’s vacation of the temporary restraints and its denial of injunctive relief. The matter then was remanded to the lower court for a thorough examination of the issues and a finding on the retiree’s claims.


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