Alcaraz v. KMF Oakland LLC

Background

Bernardo Alcaraz alleged that defendants discriminated against him because of his race, color, ancestry, or national origin. He had lived since 2010 in Apartment 403 at The Emerson in Oakland. After KMF Oakland LLC purchased the building, Alcaraz alleged that its manager made comments suggesting that, because he was Mexican, he was better suited for maintenance work than for being a tenant. He also alleged that rent checks were mishandled, leading to two unlawful-detainer eviction actions.

After Altezza Condo LLC purchased the building, Alcaraz alleged that its representative told him in 2016 that he would have the first opportunity to buy his unit for $630,000. Alcaraz said he prepared to make an all-cash purchase and sold property in Mexico to help fund it. He later alleged that Altezza did not complete the sale and that a sales agent told him Altezza would sell to anyone but him because the owners did not like him. He also alleged that all other units had been sold by mid-2018 and that none of the buyers were of Hispanic descent.

The operative third amended complaint asserted four claims: housing discrimination under the federal Fair Housing Act, race discrimination under California’s Fair Employment and Housing Act, discrimination under California’s Unruh Civil Rights Act, and unfair competition under California’s Unfair Competition Law. Alcaraz sought, among other relief, an injunction preventing his eviction and preventing Altezza from selling his home to anyone else.

Altezza’s Motion to Dismiss and Motion to Strike

Altezza argued that the Fair Employment and Housing Act claim should be dismissed because Alcaraz had not first filed an administrative charge. The court rejected that argument, holding that the exhaustion requirement cited by Altezza applied to employment discrimination and did not prevent a housing-discrimination lawsuit under the statute. The court therefore denied the motion to dismiss Claim Two.

Altezza also argued that Alcaraz lacked standing under the Unfair Competition Law because he had not alleged an economic injury, and that he had not identified an underlying legal violation. The court found that Alcaraz had sufficiently alleged economic harm, including selling his property in Mexico after being led to believe he could buy the unit and losing the opportunity to purchase comparable housing as prices increased. The court also noted that the claim incorporated alleged violations of the Fair Housing Act, the Fair Employment and Housing Act, and the Unruh Civil Rights Act. The court denied the motion to dismiss Claim Four.

Altezza separately asked the court to strike the requested injunctive relief. The court held that Altezza had omitted similar arguments from its earlier motion and could not raise them later under the federal civil-procedure rule governing successive motions to dismiss. The court also declined to allow Altezza to argue at this stage that the earlier state unlawful-detainer case barred Alcaraz’s discrimination claims. The court denied Altezza’s motion to dismiss and motion to strike the third amended complaint.

Preliminary Injunction

A preliminary injunction is temporary relief issued before a final judgment. The court considered whether Alcaraz showed a likelihood of success or serious questions on the merits, likely irreparable harm, a balance of hardships favoring him, and that the injunction would serve the public interest.

The court focused on the Fair Housing Act claim. It found that Alcaraz’s allegations—including racially suggestive comments, alleged mishandling of rent payments, the eviction actions, the 2016 communications about selling him the unit, the later refusal to sell, and the treatment of prospective Hispanic and African-American buyers—were enough at this stage to establish a preliminary case of discriminatory treatment. The court found that Alcaraz had at least raised serious questions about whether Altezza’s stated reason for refusing to sell was genuine. The court did not decide at this stage whether Altezza ultimately must sell the unit to Alcaraz for $630,000.

The court found that Alcaraz faced likely and immediate irreparable harm because he could be evicted and lose the opportunity to purchase the particular home. It found that the balance of hardships favored Alcaraz because eviction and sale of the unit could prevent him from obtaining the full relief available under the Fair Housing Act, while the harms claimed by Altezza could be compensated with money. The court also found that the public interest favored effective enforcement of fair-housing laws.

Order and Bond

Judge Susan Illston granted Alcaraz’s motion for a preliminary injunction for the duration of the case. The injunction prohibits Altezza Condo LLC and its officers, agents, employees, attorneys, and the Alameda County Sheriff’s Office from executing the state-court writ of possession for Apartment 403, taking other measures to evict Alcaraz from his home, or selling the home to anyone other than Alcaraz.

The court required Alcaraz to post a $1,000 bond each month beginning November 15, 2020, for the duration of the case. The court also stated that Alcaraz’s earlier pro se preliminary-injunction motion was deemed withdrawn and that Altezza’s motion to dissolve the temporary restraining order was denied as moot. The court granted requests for judicial notice only as to the existence of certain public records and court documents, not the truth of factual findings in those materials.