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CLIFTON TERRACE ASSOCS. v. UNITED TECHS. CORP.

January 9, 1990

CLIFTON TERRACE ASSOCIATES, LTD., Plaintiff,
v.
UNITED TECHNOLOGIES CORP. and OTIS ELEVATOR CO., Defendants



The opinion of the court was delivered by: GASCH

 OLIVER GASCH, UNITED STATES DISTRICT JUDGE

 This is an action brought by the owner of an apartment complex against the Otis Elevator Company, alleging that the latter's refusal to repair the elevators in the complex amounts to unlawful discrimination. Before the Court is defendant Otis Elevator's motion to dismiss the complaint for failure to state a claim or, in the alternative, for summary judgment. Upon consideration of defendant's motion, plaintiff's opposition thereto, and the arguments of counsel in open Court, the Court concludes that defendant's motion is properly granted. Accordingly, the Court dismisses plaintiff's complaint. *fn1"

 Plaintiff is the owner of Clifton Terrace Apartments ("Clifton Terrace"), a housing complex located in the predominantly minority neighborhood of Columbia Heights in the District of Columbia. Plaintiff alleges that Otis Elevator ("Otis") refuses to repair or maintain the elevators in Clifton Terrace because the residents therein are primarily black, handicapped, or elderly. Plaintiff claims that this refusal to deal constitutes unlawful discrimination in violation of federal and state laws and seeks declaratory and injunctive relief that would require Otis immediately to repair and thereafter to service the elevators at Clifton Terrace. Plaintiff also seeks compensatory, punitive, and treble damages, although in no specified amounts.

 The key facts are largely undisputed. In November, 1971, Otis installed six elevators in the five-story Clifton Terrace complex. Under contract, Otis serviced these elevators from 1971 until 1980. On July 23, 1980, Otis was notified by letter from the previous owner of Clifton Terrace, Hunneman Investment Management Corporation, that this maintenance contract would be terminated effective August 23, 1980. Otis was advised that the contract was awarded to another company as of September 1, 1980. There is no contract between the parties to the instant dispute.

 Plaintiff Clifton Terrace Associates, Ltd. ("Clifton Associates") is a private partnership that purchased Clifton Terrace from the Department of Housing and Urban Development ("HUD") in 1983. Plaintiff admits that elevator service has been intermittent since that time, claiming that companies other than Otis have "proven incapable of keeping the elevators at Clifton Terrace operational and safe, at a reasonable cost." Complaint at para. 14. Plaintiff alleges that when it purchased Clifton Terrace in 1983 it "presumed - and relied on the presumption - that United/Otis' maintenance services would be available" for the elevators in the complex. Id. at para. 12. Plaintiff alleges that its employees "repeatedly requested" a bid from defendants to provide elevator repairs, but defendants never responded. Id. at para. 16. Defendants' company records reflect no contact between Clifton Terrace and Otis representatives from the time of the contract's cancellation in 1980 until September 20, 1988.

 On September 20, 1988, George Marshall, a principal of Clifton Associates, telephoned Paul Ammermuller, Otis's District Service Manager for the Washington District. According to plaintiff, Mr. Ammermuller "promised to provide an inspection and repair proposal within two weeks," but did neither. Complaint at para. 17. According to defendants, Mr. Ammermuller advised Mr. Marshall that plaintiff would first need to furnish written credit references and other information, which Otis never received. Having received nothing, Mr. Ammermuller assumed that Mr. Marshall was no longer interested in contracting with Otis. Defendant Otis Elevator's Statement of Material Facts (hereinafter "Otis's SMF"), at paras. 5-8.

 On December 6, 1988, the Elevator Supervisor for the District of Columbia informed plaintiff that the elevators in at least one Clifton Terrace complex were hereby "sealed out of service" due to disrepair. Defendant's Motion to Dismiss, Exhibit 2. Ten days later, on December 16, 1988, Mr. Marshall wrote a letter to Otis and sent copies of the letter to five Otis/United Technologies executives. Complaint at para. 18; Complaint, Exhibit A. The letter accused Mr. Ammermuller of reneging on his promise to provide an inspection and repair proposal. It further stated, in relevant part:

 
We believe Otis has "redlined" Clifton Terrace and is violating the law by intentionally refusing to maintain the elevators because the residents are mostly poor and black.
 
Otis's refusal to maintain the elevators has greatly damaged the residents and owner of Clifton Terrace. We cannot now quantify the damages to the elderly and handicapped, but they are substantial.
 
We do not wish a quote on the cost of repairing the elevators. To the contrary, we simply ask that they be repaired promptly so that the damages will at least not continue. When the elevators are operational, we can at that time discuss who owes what.
 
We regret the necessity, but we fully intend to pursue any legal options if repairs are not commenced by December 21 and completed shortly thereafter.

 The letter further explained that plaintiff would consider joining United Technologies in any lawsuit. Finally, the letter advised:

 
Because of its history, Clifton is highly visible and is regularly and prominently featured in The Washington Post. The mayor of Washington's ex-wife, who was involved with the property before its purchase by the present Owner, was sentenced to prison for actions related to Clifton Terrace. If the Owner is forced to go to court, there is a great possibility of adverse publicity as well as the expense of defense and the cost of award and/or settlement.

 A copy of this letter was also sent to the Elevator Supervisor for the District of Columbia in response to his prior inspection report. Attached thereto was a cover letter from Mr. Marshall, also dated December 16, 1988, which stated: "We share your concern for these elevators, and have been attempting for some time to obtain repairs from Otis. Repairs were promised nearly three months ago." Defendant's Motion to Dismiss, Exhibit 2.

 On December 23, 1988 defendants, through counsel, responded to Mr. Marshall's letter of December 16. Defendants' letter explained that credit information was of particular importance in light of their past experience with Clifton Terrace, which showed that payments were frequently several months late and that some contract charges had to be written off as uncollectible. Defendants explained that the necessary credit information promised Mr. Ammermuller in October was never received, and they assumed that Clifton Associates was no longer interested. Defendants concluded: "If you are interested in having Otis perform elevator work, please contact the undersigned." Defendant's Motion to Dismiss, Exhibit 3.

 More correspondence, both oral and written and of similar character, ensued. Finally, by letter dated January 31, 1989 defendants informed Mr. Marshall that they saw no reason for continuing discussions. The letter expressed concern for the safety of Otis employees and concern over the "tone" of the parties' recent communications. It stated: "We cannot do business with someone who has repeatedly threatened litigation against us. This situation is not conducive to a sound contractual relationship." Complaint, Exhibit C; Defendant's Motion to Dismiss, Exhibit 6.

 Plaintiff filed suit in April, 1989, alleging in a six-count complaint that defendants' refusal to repair and service the elevators at Clifton Terrace is unlawful under the Fair Housing Act (Count I), the Civil Rights Acts (Count II), the D.C. Human Rights Act (Count III), and the D.C. Consumer Protection Act (Count IV). Plaintiff further alleges that defendants' refusal to deal violates implied "warranties of continued service and fair dealing" (Count V) and is unconscionable in violation of public policy (Count VI). The gravamen of plaintiff's complaint is that Otis has refused to negotiate a contract to service the elevators in Clifton Terrace because the residents therein are primarily poor, black, handicapped, or elderly. Otis denies this charge, maintaining that plaintiff's failure to respond to Otis's request for legitimate business information, coupled with plaintiff's belligerent threats of litigation, led to the discontinuance of business discussions.

 Otis claims that at least fifteen companies in the Washington area have the capability to service and maintain elevators. Otis's SMF, at para. 17 (listing companies). Plaintiff does not deny this. Rather, plaintiff admits -- without explanation -- that "most if not all of them have in fact also refused to deal with Clifton Terrace." Plaintiff's Opposition to Defendant's Motion to Dismiss (hereinafter "Plaintiff's Opposition"), at 17 n.11. Plaintiff states that it has sued Otis in part because of its "special duty" arising from having manufactured and installed these elevators. Id. Since filing this lawsuit, plaintiff's parent company has organized its own elevator repair service that is currently working to restore the elevators at Clifton Terrace. Plaintiff concedes that this development may obviate the need for injunctive relief to the extent originally requested, although "technical assistance from Otis may be required in lieu of actual service." Id. at 4 n.3, 9 n.6.

 II. DISCUSSION

 Defendant Otis has moved to dismiss on the grounds that plaintiff lacks standing and has failed to state a cause of action. In the alternative, Otis seeks summary judgment on the grounds that plaintiff has failed to establish a prima facie case of discrimination, while defendant has articulated legitimate business reasons for refusing to contract with plaintiff.

 As a threshold matter, defendant argues that plaintiff lacks standing to pursue its claims under the federal statutes. To establish standing sufficient to meet the requirements of Article III of the Constitution, a plaintiff "must allege and prove three elements: (1) personal injury; (2) fairly traceable to the defendant's allegedly unlawful conduct; and (3) likely to be redressed by the requested relief." America West Airlines, Inc. v. Burnley, 267 U.S. App. D.C. 393, 838 F.2d 1343, 1344 (D.C. Cir. 1988), citing Allen v. Wright, 468 U.S. 737, 751, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984). Defendant argues that plaintiff's alleged injuries are not "fairly traceable" to Otis's conduct, but instead are traceable to plaintiff's own neglect of the elevators' state of disrepair. In the alternative, defendant argues that this Court should decline jurisdiction as a prudential matter, because plaintiff is not the proper party to assert the legal rights and interests of the Clifton ...


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