Brown v. Pfeiffer

Background

Shatara Brown, Nikoe Lee, and Colleana Young sued Reese Pfeiffer, Fruen & Pfeiffer LLP, Michael Fruen, and M Fruen Properties LLC. They alleged violations of the Fair Housing Act, a federal law that prohibits sex discrimination in housing; violations of the Minnesota Human Rights Act; and negligent supervision.

The plaintiffs alleged that Pfeiffer, who was identified as landlord and property manager for the relevant properties, made sexual comments and advances toward them. They also alleged that he retaliated against Brown and engaged in conduct connected to rent and eviction proceedings. Fruen and Pfeiffer were described as co-owners of Fruen & Pfeiffer LLP, and Fruen was described as the owner of M Fruen Properties LLC.

Fruen moved to dismiss the claims against him in his individual capacity under Rule 12(b)(6), which allows dismissal when a complaint does not state a legally sufficient claim. For this type of motion, the court generally accepts the complaint’s factual allegations as true and asks whether they plausibly support relief.

Fair Housing Act and Minnesota Human Rights Act claims

The court assumed, for purposes of the motion and consistent with the parties’ arguments, that the plaintiffs had stated a plausible Fair Housing Act claim against Pfeiffer. The court then considered whether Fruen could be held personally liable for the alleged conduct.

The court rejected the plaintiffs’ theory of vicarious liability. Vicarious liability generally holds an employer or principal responsible for an employee’s or agent’s conduct. The court explained that, under traditional agency principles, the business entity—not ordinarily its owner or officer—is subject to that liability. The amended complaint did not include a claim to pierce the corporate veil, meaning a claim seeking to treat the company’s legal obligations as the individual owner’s obligations. Therefore, the plaintiffs did not plausibly allege that liability of Fruen’s business entities could be imposed on Fruen personally.

The plaintiffs also relied on a federal housing regulation addressing direct liability. The court concluded that the regulation did not create a basis for holding Fruen individually liable. The regulation can impose direct liability on a housing provider that fails to correct discriminatory conduct by an employee, agent, or certain third parties when the provider knew or should have known about the conduct and had the power to correct it. The court reasoned that the complaint identified Fruen’s business entities—not Fruen personally—as the owners or employer with the relevant responsibilities. The complaint did not suggest that Fruen, acting individually, had legal responsibility for or power to control Pfeiffer’s conduct.

The court therefore held that the plaintiffs failed to state Fair Housing Act and Minnesota Human Rights Act claims against Fruen in his individual capacity.

Negligent supervision

The court also dismissed the negligent-supervision claim against Fruen. Under the Minnesota law described in the opinion, negligent supervision is based on an employer’s failure to use reasonable care to prevent foreseeable misconduct by an employee. The court found that the plaintiffs had not adequately alleged an employer-employee or principal-agent relationship between Pfeiffer and Fruen. The court also found that they alleged emotional and financial injuries, but no physical injury, which the cited Minnesota cases required for this claim.

Disposition

Judge Wright granted Michael Fruen’s motion to dismiss. The plaintiffs’ claims against Fruen were dismissed without prejudice. The order did not dismiss the claims against the other defendants.