Alcaraz v. KMF Oakland LLC

Background

Bernardo Alcaraz alleged that he and his family had lived in a 33-unit residential complex since August 2010. He claimed that defendants refused to sell him the residence he occupied because of his race, color, or national origin. He also alleged that rent checks began to be refused, that KMF Oakland LLC pursued an unlawful detainer case against him, and that he was misled into believing no trial would take place while he was traveling internationally.

After the building was sold to Altezza Condo LLC, Alcaraz alleged that Altezza offered to sell him his unit for $630,000, but that the sale did not occur. He previously sued Altezza in state court for breach of contract and promissory estoppel. Altezza won summary judgment in that case, and Alcaraz appealed. In this federal lawsuit, the remaining claims were under the federal Fair Housing Act, a constitutional claim under 42 U.S.C. § 1983, and a request for injunctive relief.

Res Judicata

Altezza argued that the earlier contract case barred the federal lawsuit under res judicata, a rule that can prevent a party from bringing claims that were already decided or could have been brought in an earlier case. The court rejected that argument for two reasons. First, the earlier case did not yet have a final judgment for this purpose because Alcaraz’s appeal remained pending. Second, the two cases involved different claims: the earlier case concerned contract and promissory-estoppel issues, while this lawsuit alleged discriminatory housing practices. The court therefore held that res judicata did not bar the federal claims.

Fair Housing Act Claim

The court held that Alcaraz alleged enough facts to state a claim under the Fair Housing Act. The allegations included that the property manager made a disparaging statement about Alcaraz’s Mexican citizenship and suitability for ownership, that his rent checks were refused, that an unlawful detainer case followed, and that the units were sold as condominiums without any sale to a buyer of Hispanic or Mexican origin. The court stated that the allegations could have been stronger but were sufficient at the pleading stage. It denied Altezza’s motion to dismiss the Fair Housing Act claim.

Constitutional Claim

Alcaraz alleged that defendants violated due process and equal protection by deceiving him about the unlawful detainer case and using the county sheriff’s office to remove him. He invoked 42 U.S.C. § 1983, which requires allegations that a federal right was violated by someone acting under state law. The court found that Alcaraz’s references to due process, equal protection, and the Fair Housing Act did not explain how his constitutional rights were violated. It therefore granted Altezza’s motion to dismiss the Second Claim for Relief without prejudice and with leave to amend.

Injunctive Relief and Disposition

The court found that the complaint stated a claim for injunctive relief based on the Fair Housing Act because that statute permits courts to award an injunction when appropriate. It denied dismissal of the Third Claim for Relief.

The court denied Altezza’s motion to dismiss with respect to the First and Third Claims for Relief. It granted the motion to dismiss without prejudice with respect to the Second Claim for Relief, which was dismissed with leave to amend. The court required an amended complaint to be filed by January 3, 2020. The court also granted Altezza’s request for judicial notice in its entirety.