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NO. 19-1381
UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT
SAMUEL K. GILES,
Plaintiff-Appellant,
v.
ALTO PARTNERS, LLLP,
Defendant-Appellee.
On Appeal from a Motion for Summary Judgment of the
U.S. District Court for the District of Colorado
(Honorable R. Brooke Jackson)
BRIEF OF PLAINTIFF - APPELLANT
(Corrected)
Oral Argument Requested
Samuel K. Giles
Pro Se Plaintiff-Appellant
WESTMINSTER, COLO. 80030
(419) 699-5600
______________________________________________________________________
ii
TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES …………………….………………..............................................................................iii
STATEMENT OF PRIOR & RELATED APPEALS .........................................................................................v
CORPORATE DISCLOSURE STATEMENT ……………….............................................................................. v
GLOSSARY …………………………………………..……………….............................................................................. v
LEGISLATIVE HISTORY ..……….……..…….………………..................................................................................1
INTRODUCTION …………………….……..…….………………..................................................................................2
STATEMENT OF JURISDICTION ……..…….……………….................................................................................5
STATUTES & REGULATIONS ………...…….………………...................................................................................5
ISSUES PRESENTED FOR REVIEW ……….……………….................................................................................6
STATEMENT OF THE CASE …………..…….………………...................................................................................6
STATEMENT OF THE FACTS ………..…….………………....................................................................................8
SUMMARY OF ARGUMENT ………..……….……………….................................................................................13
STANDARD OF REVIEW …….……..……….………………..................................................................................14
ARGUMENT …………………….….……..……….………………................................................................................16
I. Alto Partners Failed to Satisfy Its Burden of Production …………………………………….......18
A. Alto Partners Failed to Establish a Prima Facie Showing………………………………….19
B. Alto Partners Explanation is Legally Insufficient……………………………………………..20
i. Alto Partners’ “Wages” Based Income Determination Method is Inconsistent
with IRC §42……………………………………………………………………………………………20
ii. IRS Schedule C (Form 1040) is a Verifiable Document……………………………….23
iii. The District Court’s Ex Post Facto Rule is Unconstitutional……………………….24
C. Alto Partners Failed to Affirmatively Demonstrate Lack of Evidence………………..29
II. There is Sufficient Evidence in the Record to Create a
Genuine Issue of Material Fact…………………………………………………………………………..…31
A. The District Court Made All Inferences in Favor of the Moving Party……………..…33
i. The District Court Discounted Evidence Supporting a Prima Facie Case…….34
ii. Wages Income Determination Method Cloaks Suspicion of Mendacity……….36
iii. Alto Partners’ Manifestation of Protected Class Status ……………………………..41
iv. Mr. Giles Never Refused to Submit Verification Documents……………….………43
B. Alto Partners’ Changing Positions are Subject to Judicial Estoppel…………….…….45
III. The District Court’s Ex Post Facto Rule Demonstrates Pretext……………………….………50
CONCLUSION………………………….......................................................................................................................52
iii
TABLE OF AUTHORITIES
CASES
Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-161 (1970) …………………………………………………18
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) ………………………………15, 18, 36, 42
Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252 (1977) ……………………………….49, 51
Argentina v. Weltover, Inc., 504 U.S. 607,618 (1992) …………………………………………………….25
Asbury v. Brougham, 866 F.2d 1276, (10th Cir. 1989) …………………………………………….………15
Brown v. Parker-Hannifin Corp., 746 F.2d 1407, 1411 (10th Cir. 1984) ………………………….31
Burkevich v. Air Line Pilots Ass'n, 894 F.2d 346,352 (9th Cir. 1990) ………………………………33
Celotex Corp. v. Catrett, 477 U.S. 317; (1986) ………………………………………………………………29, 30
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ……13, 43
Concrete Works of Colo., Inc. v. City and Cty. of Denver, 36 F.3d 1513, (10th Cir. 1994) ………34
DePaula v. Easter Seals El Mirador, 859 F.3d 957, 970 (10th Cir. 2017) ……………………………16
Ebert v. Poston, 266 U.S. 548, 554 (1925) ………………………………………………………………………41
Evans v. Ray, 390 F.3d 1247 (10th Cir 2004). ……………………………………………………………………27
Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373 (1981)…………………………………………..5.
Glover v. Standard Fed. Bank, 283 F.3d 953 (8th Cir. 2002) ……………………………………………43
Hawkins v. Mullin, 291 F.3d 658, 665 (10th Cir. 2002) …………………………………………………….27
Iselin v. United States, 270 U.S. 245, 251 (1926) ………………………………………………………………...41
jones v. Smart, [1785] 1 Term Rep. 44, 52 …………………………………………………………………………..40
Lytle v. Household Mfg., Inc., 494 U.S. 545 (1990) ……………………………………………………………34
Marks v. United States, 430 U.S. 188 (1977) ……………………………………………………………………27
McDonald v. Champion, 962 F.2d 1455, 1458-59 (10th Cir. 1992) …………………………………..28
McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) ……………………………………………………....15
New Hampshire v. Maine, 532 U.S. 742, (2001) ……………………………………………………………..45, 49
Personnel Adm'r of Massachusetts v. Feeney, 442 U.S. 256 (1979) …………………………………..51
iv
Postal Service Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983) …………………………………..34
Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995) ……………………………………………..16
Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133 (2000) …………………………...5, 18, 36, 49
Reno v. Bossier Parish School Bd. 520 U.S. 471 (1997) ………………………………………………………51
Rogers v. Tennessee, 532 U.S. 451 (2001) ………………………………………………………………………….26
Skidmore v. Swift, 323 U.S. 134 (1944) ………………………………………………………………13, 44, 45
Society for the Propagation of the Gospel v. Wheeler, 22 F. Cas. 756,767……………………………26
Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248; 101 S. Ct. 1089 (1981) ………………………20
United States v. Sorensen, 801 F.3d 1217 (10th Cir 2015) ……………………………………………….14
Yousuf v. Cohlmia, 741 F.3d 31, 37 (10th Cir. 2014)……………………………………………………………..14
FEDERAL STATUTES
The United States Constitution ...........................................................................................................25
42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968)....................................32
42 U.S.C.S. § 3604(b) (Fair Housing Act of 1968 – Terms & Conditions)……………………...35
42 U.S.C. § 1437f (United States Housing Act of 1937)…………………………………..……3, 4
Tax Reform Act of 1986 (26 U.S.C. §42 / IRC §42) ………………………………….…………..2,3
IRC §42 …..…............................................................................................3, 13, 19, 21, 22, 27, 29, 34
IRC §42 (g)…..…................................................................................................. 13, 16, 19, 22, 23, 46
IRC §42 (g)(4)…..…...................................................................................................................................3
IRC §42 (i)(3)(A)…................................................................................................................................5, 8
IRC §142 (d)(2)(B)...................................................................................................................................3
FEDERAL REGULATIONS
24 CFR Section 5.609 - Annual Income…………………3, 8, 13, 16, 19, 22, 23, 34, 46, 48
24 CFR Section 5.609 (a)(1)…………………………………………………………………………………4
24 CFR Section 5.609 (a)(4)…………………………………………………………………..……………4
24 CFR Section 5.609 (b)(2)……………………………………….………4, 22, 23, 25, 27, 48, 49
24 CFR § 100.65 ……………………………………………………………………………..……………….…5
Treasury Regulation Section 1.42-5(b)(1)(vii)……………………………………….……………..3
Fed. R. Civ. Pro. 56……………………………………………..…………………….…14, 18, 19, 30, 32
v
STATE OF COLORADO REGULATIONS
Constitution of the State of Colorado, art II, §11 ………………………………..……………………………..24
OTHER AUTHORITIES
Colorado Housing & Finance Authority
Low-Income Housing Tax Credit Manual v. 7…..……………......................................21, 22, 23, 37, 48
HUD Occupancy Handbook 4350.3…………..….............................................................................16, 18, 36
U.S. House Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313)…………………1,2
U.S. GAO, Report to the Chairman, Joint Committee on Taxation, Rental Housing …………….1,2
U.S Internal Revenue Service; July 1988 Internal Revenue Bulletin; Notice 88-80 ……………4
Wright, A. Miller, & M. Kane, Federal Practice and Procedure…………………17, 18, 28, 39, 40
J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice …………………………………………...17
The Digest of Justinian ………………………………………………………………………………………………...20
Black’s Law Dictionary ……………………………………………………………………………………………20, 41
Administrative Law and the Interpretation of Statutes ………………………………………………...21
Substantive Criminal Law ………………………………………………………………………………..…………25
Commentaries on American Law 432 (1826) ………………………………………………………………35
STATEMENT OF PRIOR & RELATED APPEALS
Pursuant to 10th Cir. R. 28.2(C)(1), this appeal is related to Appellate Case No. 18-1148.
RULE 26.1 CORPORATE DISCLOSURE STATEMENT
Appellant Samuel K. Giles is a pro se litigant and has no parent corporation or publicly held
corporation that owns 10% or more of any shares.
GLOSSARY OF TERMS
CHFA Colorado Housing and Finance Authority
LURA Land Use Restriction Agreement
HUD U.S. Department for Housing and Urban Development
IRC Internal Revenue Code
LIHTC Low-Income Housing Tax Credit
Annual Income All amounts, monetary or not, that go to or are received on behalf of
the family head....
Gross Undiminished by deduction
[1]
LEGISLATIVE HISTORY
The Tax Reform Act of 1986 was enacted by unanimous vote (20-0) only
after an all-encompassing comprehensive review in the 99th Congress. This
charge was led by the Committee on Finance, and several subcommittees in
public hearings and markup consideration. At that time, the Tax Reform Act was
the most extensive review of internal revenue laws since the enactment of the
1954 Internal Revenue Code.
This massive undertaking was designed to address the problem that
current housing programs failed to adequately target low-income households.
Specifically, the Tax Reform Act of 1986 designated the Low Income Housing Tax
Credit (LIHTC) program to address this specific societal ill. More importantly,
the committee’s primary concern was as follows:
“The committee is concerned that the existing tax preferences for low-
income rental housing have not been effective in providing affordable
housing for low-income individuals. The committee believes a more
efficient mechanism for encouraging the production of low-income rental
housing … Certain of the existing Federal tax subsidies are not targeted to
persons of truly low-income.”1
At that time, a study by the General Accounting Office2 of tax-exempt bond
financed residential rental projects concluded that above-average income renters
1
U.S. House. Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313). Washington:
Government Printing Office, 1986
2
United States General Accounting Office, Report to the Chairman, Joint Committee on Taxation, Rental
Housing: Costs and Benefits of Financing with Tax-Exempt Bonds, GAO/RCED-86-2, February 1986.
[2]
can qualify as "low" or "moderate" income to gain access to affordable housing
benefits. As well, another shortcoming of the tax subsidies at the time was that
none limited the rents that may be charged to low-income households.
The same GAO study found:
“that while 96 percent of individuals with incomes over 80 percent of area
median income (the present ceiling on "low" or "moderate" income) paid
rents of less than 30 percent of their income, only 37 percent of individuals
with incomes below 80 percent of area median paid rents of less than 30
percent of their income.”
See U.S. General Accounting Office, Report to the Chairman, Joint Committee on
Taxation, Rental Housing.3 The LIHTC program, however, addressed these
societal concerns by binding rent to tenant income, and therefore ensuring that
the subsidized housing is affordable to low-income households. Specifically, “the
[LIHTC program] is better targeted to low-income individuals than provisions
under present law, and requires that tenants' rents are limited to affordable
amounts in relation to their incomes.”4 (emphasis added.)
INTRODUCTION
Prior to the Tax Reform Act of 1986, citizens with above average income
levels were able to qualify for subsidized housing, thus, increasing undue
3
Id.
4
U.S. House. Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313). Washington:
Government Printing Office, 1986.
[3]
competition for America’s limited affordable housing stock. However, in 1986,
Congress successfully addressed this concern of increased unintended
competition for subsidized housing in America with the Low-Income Housing
Tax Credit (LIHTC) program, codified under title 26 - Internal Revenue Code of
the United States Code, section 42 (26 U.S.C. §42). Since the enactment of the Tax
Reform Act, the LIHTC program has capped rents based on tenant income,
created more than 3 million housing units, and became widely lauded as the
most successful affordable housing program in American history.
During the Scheduling Conference held for proceedings in the instant
matter, the district court stated: “The whole issue turns on whether he's
financially qualified for one of your units.” See R., Vol II at 1301 ¶1. In this LIHTC
program context, housing qualification is a function of the income determination
method applied. Assuming Section 42 of the Internal Revenue Code (IRC) is
statutorily permissible, then the income determination method declared under
IRC §42(g) and further promulgated by Section 5.609 of the Code of Federal
Regulations takes precedent.
Specifically, the IRS has language in its IRC §142(d)(2)(B) and by reference
from IRC §42(g)(4) that states, “income of individuals and area median gross
income shall be determined by the Secretary in a manner consistent with
determinations of lower income families and area median gross income under
[4]
section 8 of the United States Housing Act of 1937.” Treasury Regulation Section
1.42-5(b)(1)(vii) has similar language that states, “Tenant income is calculated in
a manner consistent with the determination of annual income under section 8 of
the United States Housing Act of 1937 (“Section 8”).”5
The determination of income under Section 8 of the U.S. Housing Act of
1937 is found in 24 CFR Section 5.609 - Annual Income. Specifically, §5.609
(a)(1) provides, “Annual income means all amounts, monetary or not, which [g]o
to, or on behalf of, the family head.” Further, §5.609 (a)(4) states, “Annual income
also means amounts derived (during the 12-month period) from assets to which
any member of the family has access.” Moreover, §5.609 (b)(2) provides,
“Expenditures for business expansion … shall not be used as deductions in
determining net income.”
In the instant matter, these statutory mandates were deliberately ignored
and undermined. Both Mr. Giles’ 2016 and 2017 annual or gross incomes of
$35,000 and $34,125, respectively, were ignored, and his business deductions
were used as retaliatory mechanisms to reduce his annual income in order to fail
the two and a half (2.5) times rent bar. The deliberate obfuscation of this
5
See U.S Internal Revenue Service; July 1988 Internal Revenue Bulletin; Notice 88-80; 1988-2 C.B. 396;
1988-30 I.R.B. 28
[5]
statutory framework eliminated Plaintiff-Appellant’s prima facie case and
further, draws on Reeves6’ “affirmative evidence of guilt” guidance.
STATEMENT OF JURISDICTION
This is an appeal from the district court’s September 12, 2019 order and
judgement granting Defendant-Appellee’s motion for summary judgment.
Plaintiff filed a timely notice of appeal on October 11, 2019. This Court has
jurisdiction pursuant to 28 U.S.C. §1291. Under 28 U.S.C. § 1291, the court of
appeals has jurisdiction over “all final decisions of the district courts ... except
where a direct review may be had in the Supreme Court.” Firestone Tire &
Rubber Co. v. Risjord, 449 U.S. 368, 373 (1981).
STATUTES & REGULATIONS
The pertinent statutes and regulations are:
• 42 U.S.C. §§ 3601-3619 – Fair Housing Act of 1968
• 26 U.S.C. § 42 – Low Income Housing Tax Credit
• 42 U.S.C. § 1437f – U.S. Housing Act of 1937
• 24 CFR §5.609 – Tenant Annual Income
• 24 CFR §5.609 (b)(2) – Self-Employed Business Net Income
• 24 CFR § 100.65 - Discriminatory Housing Practices [Terms and Conditions]
These statutes and regulations are reprinted in the addendum to this brief.
6
Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133 (2000) (“[W]e recognized that evidence that a
defendant's explanation for an employment practice is unworthy of credence is one form of circumstantial
evidence that is probative of intentional discrimination.”)
[6]
ISSUES PRESENTED FOR REVIEW
1. Whether retroactively applied judicial legislation can constitutionally
preclude establishing a prima facie case.
2. Whether Section 42 of the Internal Revenue Code is statutorily
permissible.
3. Whether gross sales reported on Line 1 of an IRS Schedule C (Form 1040)
qualifies as “annual income” under Section 42 of the Internal Revenue Code
further promulgated pursuant 24 CFR §5.609.
This Court’s review of these issues is de novo. See “Standard of Review” Section
below.
STATEMENT OF THE CASE
On February 26, 2018, Samuel K. Giles filed a Complaint against Alto
Partners, LLLP (“Alto Partners”) in the U.S. District Court, Case Number 18-cv-
00467. On March 12, 2018, Plaintiff filed an Amended Complaint and a Renewed
Motion for Temporary Restraining Order and Preliminary Injunction. (See R., Vol
I at 123 – D.C. Dkt. No. 8)7 On March 15, 2018, the district court held an
evidentiary hearing for the Renewed Motion for Temporary Restraining Order
and Preliminary Injunction. At the hearing, the district court denied both the
temporary restraining order and preliminary injunction presented in the
Renewed Motion. (R., Vol I at 266). On April 13, 2018, Plaintiff timely filed a
7
Citation convention pursuant 10th Cir. R. 28.1.
[7]
notice of appeal for the denied preliminary injunction. (R., Vol I at 267; Case
Number 18-1148). On April 20, 2018, Alto Partners filed a motion to dismiss. (R.,
Vol II at 3 - D.C. Dkt. No. 20) On August 22, 2019, the trial court held a scheduling
conference. (See R., Vol II at 832 - D.C. Dkt. No. 33) On October 18, 2018, the
motion to dismiss was denied. (R., Vol II at 3 - D.C. Dkt. No. 37)
On January 31, 2019, the Tenth Circuit affirmed the trial court’s denial of
the preliminary injunction. (See R., Vol II at 879) On March 20, 2019, the district
court compelled production of Mr. Giles’ 2016 IRS tax transcripts, and 2017 tax
return, profit and loss statement, and IRS tax transcripts. (See R., Vol II at 7 – D.C.
ECF No. 64) On April 25, 2019, Alto Partners filed a motion for summary
judgment. (See R., Vol II at 140 - D.C. Dkt. No. 67) On August 14, 2019, Plaintiff
filed a request to take judicial notice. (D.C. Dkt. No. 78) No ruling was provided
on the request to take judicial notice. On August 26, 2019, the trial was reset
until February 24, 2020. On September 12, 2019, the trial court granted Alto
Partners’ motion for summary judgment. (See R., Vol II at 102 - D.C. Dkt. No. 82)
Plaintiff timely filed a notice of appeal for the granted motion for summary
judgment. (See R., Vol II at 120 - D.C. Dkt. No. 86).
[8]
STATEMENT OF FACTS
Mr. Giles is a long-term resident of Terrace Gardens Apartments, owned
and operated by Adams County Housing Authority (ACHA). On May 25, 2010
Plaintiff-Appellant executed his lease with ACHA.
On October 19, 2017, ACHA hosted a Terrace Gardens Town Hall for
current residents to discuss its development plans of the campus and the
likelihood of current tenants being displaced due to expansion activities. See R.,
Vol II at 599. Zachery Guerin, director of property operations, testified that
Terrace Gardens are “older buildings.”8 Additionally, the City of Westminster
issued ACHA Notice of Non-Compliance for Terrace Gardens. See R., Vol II at 572.
Accordingly, ACHA extended an opportunity for tenants to relocate into its
seventy (70) unit affordable housing development under construction on the
Terrace Gardens campus entitled Alto Apartments. See R., Vol II at 600.
Alto Partners, LLLP (Defendant-Appellee) owns the Alto Apartments
development, Alto GP, LLC is the general partner of Alto Partners, LLLP and
ACHA is the sole member of Alto GP, LLC. See R., Vol I at 195. Alto Apartments is a
low-income housing tax credit (LIHTC) development regulated under Section 42
of the Internal Revenue Code (IRC). Each unit of Alto Apartments is a low-income
unit as defined under IRC § 42(i)(3)(A). Tenant eligibility is a function of
8
See R., Vol II at 1270 ¶8
[9]
“income” pursuant IRC §42(g). The income determination method declared
under IRC §42(g) is further promulgated by 24 CFR §5.609, defining “annual
income” as “All amounts, monetary or not...”
On October 23, 2017, Mr. Giles, submitted a housing application for Alto
Apartments unit #215 with requested 2016 tax forms for income verification. See
R., Vol II at 612. The maximum income limitation for Alto Apartments is $35,280
for an individual applicant. See R., Vol II at 657.
To qualify for housing, an applicant may demonstrate, "verifiable
minimum gross monthly income of at least 2.5 times the tenant's paid portion of
the rent.” See R., Vol II at 615. In the instant case, this totals a minimum annual
gross income of $34,020. In the alternative, an applicant may provide a
“saving/checking account balance higher than the rest of the amount for half of
the term of lease." In the instant case, this would total $6,804. Id.
Line 1 of Mr. Giles’ 2016 IRS Schedule C (Form 1040)9 and page 3 of the
2016 IRS transcript report gross sales of $35,000.10 Both the 2016 IRS Schedule
C (Form 1040) and 2016 IRS transcript designate gross sales under the “Income”
section. Line 26 of Mr. Giles’ IRS Schedule C (Form 1040)11 and page 4 of the IRS
transcript report wages of $27,500.12 Both the 2016 IRS Schedule C (Form 1040)
9
See R., Vol II at 624
10
See R., Vol II at 693
11
See R., Vol II at 624
12
See R., Vol II at 694
[10]
and 2016 IRS transcript designate wages under the “Expenses” section. Mr. Giles
declared expenditures dedicated to business expansion totaling $7,500, and a 6-
month average checking account balance from July 2017 to December 2017 of
$8,844.52. See R., Vol II at 559 ¶14.
On October 30, 2017, Mr. Giles inquired with Zachary Guerin, director of
property operations with Alto Partners, regarding the status of the rental
application. Mr. Guerin acknowledged Mr. Giles’ gross earned income as $35,000.
See R., Vol II at 664.
Despite being instructed that there would be a 24 to 72-hour turnaround
to process the application, Alto Partners strategically delayed rejecting Mr. Giles’
application for over 100 days. Additionally, out of 70 available units, Mr. Giles
was not offered one unit. See R., Vol II at 562 ¶29
Upon request of Alto Partners, on December 4, 2017, Mr. Giles submitted a
business plan, 2016 profit loss statement and supplemental income verification
documents. See R., Vol II at 262. On December 11, 2017, Defendant entered into
a Land Use Restriction Agreement (LURA) with the Colorado Housing and
Finance Authority (CHFA), in which Mr. Giles is a third-party beneficiary. See R.,
Vol II at 419. On December 19, 2017, ACHA acknowledge receipt of the 2016 tax
returns, 2016 business plan and profit and loss statement, and other application
materials. See R., Vol II at 524.
[11]
On January 10, 2018, Marcia Bross, compliance specialist with Alto
Partners, demanded the execution of additional “missing” income verification
documents and to produce a 2017 profit and loss statement within an arbitrary
two-day deadline, January 12th at 4:00pm. See R., Vol II at 253. The CHFA LIHTC
Compliance Manual mandates a singular financial statement. See R., Vol II at 469.
Neither IRC §42, the LURA, nor the CHFA LIHTC Compliance Manual permit
enhanced terms and conditions for occupancy such as a 48-hour submission
window and two years of annual profit and loss statements.13
Further, Mr. Giles was told that failure to meet terms and conditions would
result in loss of his housing opportunity. See R., Vol II at 253. The requested
documents had never been asked for prior to Ms. Bross’s email on January 10th.
On January 12th, Mr. Giles asserted his Fair Housing rights, and submitted all
documents within his possession, custody or control - executed income
verification documents without the 2017 profit and loss statement. See R., Vol II
at 257.
On January 17, 2018, in response to a voice mail ultimatum from Ms. Bross,
submit a 2017 profit and loss statement by tomorrow or lose the housing unit.14
Mr. Giles submitted all documents within his possession, custody or control - the
business plan with the 2016 profit and loss statement. See R., Vol II at 346.
13
See R., Vol II at 564 ¶38
14
See R., Vol II at 272
[12]
On January 29, 2018, Niki Rush, ACHA compliance manager, ignored
reported gross sales15 and business expenses and confined the income
determination method for Mr. Giles to business net income. See R., Vol II at 899.
On February 7, 2018, Sylvia Anderson, property manager for Alto Apartments,
formally denied the housing application. See R., Vol II at 784. The Colorado
Housing and Finance Authority (CHFA) LIHTC Compliance Manual incorporates
by reference Chapter 5 of the U.S. Department of Housing and Urban
Development (HUD) Occupancy Handbook for income determination purposes.16
The HUD Occupancy Handbook mandates independent investigations prior to
denial. See R., Vol II at 726.
According to the Alto Apartments website, the housing unit remained
available and Defendant-Appellee continued to solicit applications from persons
with Mr. Giles’ qualifications. See R., Vol II at 781.17 Additionally, Ms. Anderson
stated the rationale for the rejection was that Plaintiff-Appellant’s business net
income did not meet the required 2.5 times gross monthly income criteria. See R.,
Vol II at 784.
On February 8, 2018 at 10:24 AM, Mr. Giles opposed the housing denial
and submitted that CHFA, HUD, and the IRS provides guidance to use annual or
15
See R., Vol II at 624
16
See R., Vol II at 856
17
See also Plaintiff-Appellant’s Motion for Judicial Notice, Ex. E
[13]
gross income versus net income for housing criteria analysis. See R., Vol II at 285.
At 11:25 AM, Niki Rush declared Mr. Giles would “not qualify” even if his
application was accordance with the law. See R., Vol II at 900.
On February 9, 2018, Lauren Grimsley, portfolio operations manager for
Alto Partners, shifted the rationale for the denial from the improper net income
analysis for the 2.5 times gross monthly income criteria to an inability to verify
Mr. Giles’ income due to income disclosures reported on his 2016 tax returns,
specifically, IRS Schedule C (Form 1040) versus the IRS Form 1040. Ms. Grimsley
provided that only income submitted on IRS Form 1040 could be used for income
verification. See R., Vol II at 851
SUMMARY OF ARGUMENT
The trial court has interpreted IRC §42 in a manner that excludes gross
sales from the income determination method. See R., Vol II at 107-109. Further,
the trial court precluded Mr. Giles from establishing a prima facie case by
discounting evidence that ordinarily would be privy to Skidmore18 or Chevron19
deference to support its inferences in favor of the moving party.
Remarkably, through judicial legislation, the trial court transformed the
quintessential income-based aspect of this long-standing statute. Specifically, by
18
Skidmore v. Swift, 323 U.S. 134 (1944)
19
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
[14]
shifting the income determination method from the comprehensive “income” as
declared under Section 42(g) and 24 CFR §5.60920 to the narrow scope of
“wages,” the trial court single handedly reversed the efforts of Congress21 to
direct the nation’s limited affordable housing stock toward low-income
households based on its deliberately broad “income” definition – not wages.
Accordingly, the trial court’s decision consisting of ex post facto rules is not only
facially unconstitutional, but reopens the specific loophole that Congress
intended to seal - permitting above average income renters to qualify for
subsidized housing intended for low-income households. Explicitly, ignoring
gross sales as “income” and exclusively evaluating “wages,” permits above
average income renters with high gross sales to qualify for subsidized housing
with self-allocated low-income wages.
STANDARD OF REVIEW
This Court reviews questions of statutory interpretation de novo. United
States v. Sorensen, 801 F.3d 1217 (10th Cir 2015). Further, this Court reviews a
grant of summary judgment de novo, drawing all reasonable inferences and
resolving all factual disputes in favor of the non-moving party." Yousuf v. Cohlmia,
741 F.3d 31, 37 (10th Cir. 2014). A court shall grant summary judgment if "the
20
See R., Vol II at 790
21
See Legislative History, supra.
[15]
movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "As to
materiality, the substantive law will identify which facts are material. Only
disputes over facts that might affect the outcome of the suit under the governing
law will properly preclude the entry of summary judgment." Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). "[S]ummary judgment will not lie if the
dispute about a material fact is 'genuine,' that is, if the evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Id. At "the
summary judgment stage the judge's function is not [] to weigh the evidence and
determine the truth of the matter but to determine whether there is a genuine
issue for trial." Id. at 249.
This Court evaluates Fair Housing Act discrimination claims under the
three-part McDonnell Douglas analysis. Asbury v. Brougham, 866 F.2d 1276, 1279
(10th Cir. 1989)(citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)).
Under the McDonnell standard the plaintiff must first offer proof of a prima facie
case of discrimination. Id. The burden then shifts to the defendant to show that
the refusal to rent or negotiate was motivated by legitimate, non-racial
considerations. Id. Then the burden shifts back to the plaintiff to show that these
reasons were pretextual. Id. At this third step, to avoid summary judgment, the
plaintiff need only show that “there is a genuine dispute of material fact” as to
[16]
whether the “proffered reason for the challenged action is pretextual.” Randle v.
City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995) (applying McDonnell to
employment discrimination.)
To show pretext a plaintiff has several options open to him. First, he may
demonstrate that the proffered reason for the action is factually false. DePaula v.
Easter Seals El Mirador, 859 F.3d 957, 970 (10th Cir. 2017). Second, he may
demonstrate that “discrimination was a primary factor” in the defendant’s
decision. Id. This can often be achieved “by revealing weaknesses,
implausibilities, inconsistencies, incoherences, or contradictions” in the
defendants’ proffered reason “such that a reasonable fact finder could deem the
employer's reason unworthy of credence.” Id. Finally the plaintiff may also show
pretext by demonstrating that the defendant “acted contrary to written company
policy, an unwritten company policy, or a company practice.” Id.
ARGUMENT
The trial court committed several reversible errors when granting Alto
Partners’ motion for summary judgment: 1) employing and retroactively
applying ex post facto conditions, 2) cherry picking evidence from compelled
documents, 3) overlooking that Alto Partners failed to discharge its burden of
production, 4) weighing genuine issues of material fact in dispute, 5) drawing
inferences exclusively in favor of Alto Partners, 6) concluding acts obviously
[17]
contrary to policy as attempts to adhere to policy, 7) ignoring glaring
contradictions in the record, and 8) making a factually false conclusion that a
housing denial can be based on an income determination method exclusively
examining tenant “wages”.
Moreover, the trial court’s act of judicial legislation combined with
persistent disregard for both the $35,000 and $34,125 in income reported on
Line 1 of the 201622 and 201723 IRS Schedule C (Form 1040), respectively,
suggests that the non-qualification argument is a ruse. Simple logic denotes that
Mr. Giles satisfied the $34,020 qualification, thus establishing his prima facie
case. However, the level of mendacity required to cover up this straightforward
conclusion will cause any reasonable fact finder to disbelieve Alto Partners’
proffered non-discriminatory rationales.
Moreover, this is a classic example of implied repeal. The trial court
repealed by implication the income determination method declared under IRC
§42(g), 24 CFR §5.609, and mirrored in section 3.6 of the CHFA LIHTC Manual.24
This action creates more ambiguities that the plain language of the statute
22
This income is also reflected on the compelled 2016 IRS transcript. See R., Vol II at 639
23
This income is also reflected on the compelled 2017 IRS transcript. See Plaintiff-Appellant’s Motion
for Judicial Notice, Ex. A.
24
See R, Vol II at 856
[18]
permits.25 Consequently, rejection of Alto Partners’ proffered reasons will
permit the trier of fact to infer pretext of the ultimate fact of intentional
discrimination under the Reeves26 framework.
I. ALTO PARTNERS FAILED TO SATISFY ITS BURDEN OF PRODUCTION
In the context of summary judgment, the burden of establishing the
nonexistence of a "genuine issue" is on the party moving for summary judgment.
10A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2727, p.
121 (2d ed. 1983) (hereinafter Wright) (citing cases); 6 J. Moore, W. Taggart & J.
Wicker, Moore's Federal Practice para. 56.15[3] (2d ed. 1985).
This burden has two distinct components: an initial burden of production,
which shifts to the nonmoving party if satisfied by the moving party; and an
ultimate burden of persuasion, which always remains on the moving party. See
10A Wright § 2727. The court need not decide whether the moving party has
satisfied its ultimate burden of persuasion27 unless and until the court finds that
25
West Virginia Univ. Hosps. v. Casey, 499 U.S. 83, 100-01 (1991) (per Scalia, J.) (internal citation
omitted) (“it is our role to make sense rather than nonsense out of the corpus juris”)
26
Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133, (2000) (In appropriate circumstances, the trier
of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover
up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law
that the factfinder is entitled to consider a party's dishonesty about a material fact as 'affirmative evidence
of guilt.') (emphasis added.)
27
Summary judgment should not be granted unless it is clear that a trial is unnecessary, Anderson v.
Liberty Lobby, Inc., 477 U.S. 242 (1986) at 255, and any doubt as to the existence of a genuine issue for
trial should be resolved against the moving party, Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-159
(1970).
[19]
the moving party has discharged its initial burden of production. Adickes v. S.H.
Kress & Co., 398 U.S. 144, 157-161 (1970); 1963 Advisory Committee's Notes on
Fed. Rule Civ. Proc. 56(e), 28 U. S. C. App., p. 626.
A. Alto Partners Failed to Establish a Prima Facie Showing
The burden of production imposed by Rule 56 requires the moving party
to make a prima facie showing that it is entitled to summary judgment. 10A
Wright § 2727. The way this showing can be made depends upon which party
will bear the burden of persuasion on the challenged claim at trial. If the moving
party will bear the burden of persuasion at trial, that party must support its
motion with credible evidence -- using any of the materials specified in Rule
56(c) -- that would entitle it to a directed verdict if not controverted at trial. Ibid.
Such an affirmative showing shifts the burden of production to the party
opposing the motion and requires that party either to produce evidentiary
materials that demonstrate the existence of a "genuine issue" for trial or to
submit an affidavit requesting additional time for discovery. Ibid.; Fed. Rules Civ.
Proc. 56(d), (e).28
28
Mr. Giles requested to reopen discovery to analyze the terms and conditions of occupancy for similarly
situated applicants. See R., Vol II at 543 ¶14. See also Plaintiff-Appellant’s Motion for Judicial Notice,
Ex E.
[20]
B. Alto Partners Explanation is Legally Insufficient
The burden that shifts to the defendant-appellee, therefore, is to rebut the
presumption of discrimination by producing evidence that the plaintiff-appellant
was rejected, or someone else was preferred, for a legitimate, nondiscriminatory
reason. The defendant-appellee need not persuade the court that it was actually
motivated by the proffered reasons. See Tex. Dep't of Cmty. Affairs v. Burdine, 450
U.S. 248; 101 S. Ct. 1089 (1981) (“It is sufficient if the defendant's evidence raises
a genuine issue of fact as to whether it discriminated against the plaintiff.”)
However, the explanation provided “must be legally sufficient to justify a
judgment” for the defendant. Id. If the defendant carries this burden of
production, the presumption raised by the prima facie case is rebutted, and the
factual inquiry proceeds to a new level of specificity. Id.
i. Alto Partners’ “Wages” Based Income Determination Method is
Inconsistent with IRC §42
Assuming Section 42 of the Internal Revenue Code29 (IRC) is statutorily
permissible, then the income determination method declared under IRC §42(g)
and further promulgated by 24 CFR §5.609 takes precedent.30
The income
29
26 USCS § 42
30
See R., Vol II at 790
[21]
determination method of “annual income” is defined as: “All amounts, monetary
or not.”31
The words of a governing text are supposed to be of paramount concern,
and what they convey, in their context, is what the text means.32
According to
this broad “annual income” definition, it would be difficult for any rational
person to conclude that the gross sales of $35,000 reported on Line 1 of Mr. Giles’
IRS Schedule C (Form 1040) does not qualify as “annual income” under IRC §42
and 24 CFR §5.609. As Justinian's Digest put it: A verbis legis non est
recedendum33
("Do not depart from the words of the law").
Even if this Court interprets “income” exclusively from the Colorado
Housing and Finance Authority (CHFA) Low Income Housing Tax Credit (LIHTC)
Compliance Manual, Section 3.6 of the CHFA LIHTC Manual defines annual
income as: “Annual income is the gross income a family anticipates it will receive
in the 12-month period following the effective date of the certification of
income.” (emphasis added.) Black’s Law Dictionary defines “gross” as:
“Undiminished by deduction; entire <gross profits>.”34 Further, “income” is
31
24 CFR §5.609
32
"We have not traveled, in our search for the meaning of the lawmakers, beyond the borders of the statute.”
United States v. Great Northern Ry., 287 U.S. 144, 154 (1932) (per Cardozo, J.)
33
Cf. Digest 32.69 pr. (Marcellus). Cf also Uniform Statute & Rule Construction Act §19 (1995) (“Primacy of
Text. The text of a statute or rule is the primary, essential source of its meaning.").
34
GROSS, Black's Law Dictionary (11th ed. 2019)
[22]
defined as: “The money or other form of payment that one receives, usu.
periodically, from employment, business, investments, royalties, gifts, and the
like. See earnings. Cf. profit.”35
More importantly, the use of an alternative income determination method
other than “annual income” is unsupported by IRC §42 and its legislative history.
Specifically, the statute expressly denotes “income” not “wages.” The expression
of one thing implies the exclusion of others. (expressio unius est exclusio alterius).
If Congress in legislating speaks only of specific things and specific situations, it is
a legitimate inference that the particulars exhaust the legislative will. The
particular which is omitted from the particulars mentioned is the casus omissus,
which the judge cannot supply because that would amount to legislation.36
Accordingly, the trial court’s reliance on a novel “wages” income
determination method in lieu of “annual income” lacks legal footing under IRC
§42. See R., Vol II at 107. Thus, to use wages of $27,500 in lieu the annual
income (gross sales) of $35,000 or $34,125 is legally insufficient to support a
motion for summary judgment.
35
INCOME, Black's Law Dictionary (11th ed. 2019)
36
J.A. Corry, Administrative Law and the Interpretation of Statutes, 1 U Toronto L J. 286, 298 (1936).
[23]
ii. IRS Schedule C (Form 1040) is a Verifiable Document
The district court acknowledged the CHFA LIHTC Manual as the prevailing
document for interpreting provisions of the housing transaction. See R., Vol II at
110. On October 23, 2017, Mr. Giles submitted 2016 tax returns consisting of IRS
Form 1040 and IRS Schedule C (Form 1040) with the housing application and
fee.37 Line 1 of the IRS Schedule C (Form 1040) reported gross sales of $35, 000
and Line 26 wages of $27,500.38
The trial court concluded that the IRS Schedule C (Form 1040) is a non-
verifiable document. See R., Vol II at 112 - ECF No. 82, p. 11. Contrarily, Section
3.18 of the CHFA LIHTC Manual provides: “All attempts to obtain verification
must be documented. Acceptable forms of verification for specific types of
income include are as follows.”39 Section 3.18(B) explicitly lists IRS Schedule C
(Form 1040) as an acceptable form of verification: “The tax return must include
IRS Form 1040 and Schedule C.”40 (emphasis added). The term “and” signals
that the IRS Form 1040 or Schedule C alone does not meet the standard of
acceptable forms of verification. General terms are to be given their general
meaning. (generalia verba sunt generaliter intelligenda).
37
See R., Vol II at 559 ¶10
38
See R., Vol II at 624
39
See R., Vol II at 467
40
See R., Vol II at 1194
[24]
Notably, the trial court elected to ignore precise language in the CHFA
LIHTC Manual outlining the verifiability of IRS Schedule C (Form 1040). Tenants
must supply both documents and each are verifiable. Accordingly, it is legally
insufficient to ignore a required verifiable document, hence, Alto Partners failed
to meet its burden of production under Rule 56.
iii. The Trial Court’s Ex Post Facto Rule is Unconstitutional
If IRC §42 is statutorily permissible, then the income determination
method declared under IRC §42(g) and further promulgated by 24 CFR §5.609 is
binding. Moreover, Section 5.609(b)(2) provides narrow and precise instruction:
“Expenditures for business expansion or amortization of capital indebtedness
shall not be used as deductions in determining net income.”41 (emphasis added)
This notion is mirrored in the CHFA LIHTC Manual, specifically, Section 3.9
states, “You may not deduct: interest on loans or other expenses for business
expansion.” See R., Vol II at 858.
Under the plain language of this statute, the $7,500 in business expenses
used to expand Mr. Giles’ business must be added to the $27,500 in wages he
paid himself. See R., Vol II at 559 ¶14. In contrast, the trial court interpreted
Section 5.609(b)(2) as: “But Mr. Giles did not provide ACHA with documentation
41
See R., Vol II at 1256
[25]
that $7,500 of his business gross earnings were used for business expansion at
the time he applied.”42 (emphasis added.)
Although there is historical precedent in Anglo-American law to
contemplate how the lawgiver would have wanted judges to resolve a legal
question, however, today it is anomalous and philosophically indefensible as
violating the separation of powers, and it produces considerable judicial
mischief. "The question ... is not what Congress 'would have wanted' but what
Congress enacted." Argentina v. Weltover, Inc., 504 U.S. 607,618 (1992) (per
Scalia, J.).
Further, a statute presumptively has no retroactive application. "The
presumption is very strong that a statute was not meant to act retrospectively,
and it ought never to receive such a construction if it is susceptible of any other."
- United States Fid. & Guar. Co. v. United States ex ref. Struthers Wells Co., 209 U.S.
306, 314 (1908) (per Peckham, J.). Additionally, in the words of Justice Joseph
Story (describing the New Hampshire Constitution's prohibition of
"retrospective" laws), "take away or impair vested rights acquired under existing
laws or create a new obligation, impose a new duty, or attach a new 'disability, in
42
See R., Vol II at 113 or ECF No. 82, p.12
[26]
respect to transactions or considerations already past."43 (emphasis added.)
Since the presumption is a canon of interpretation and not a rule of
constitutional law, a statute can explicitly or by clear implication be made
retroactive. Its retroactive operation may, but will not necessarily, violate one of
the Ex Post Facto Clauses,44 one of the Due Process Clauses,45 the Takings
Clause,46 or the Obligation of Contracts Clause47 of the United States Constitution,
or similar provisions in the State of Colorado Constitution.48
In the instant matter, retroactively requiring Mr. Giles to submit a list of
business expenses at the time of application in order for the §5.609(b)(2) statute
to be applicable is unforeseeable and, facially, an ex post facto rule. Although ex
post facto principles are thus relevant to the retroactive application of judicial
decisions through the due process clause of either the Fifth or the Fourteenth
Amendment, the Ex Post Facto Clause is not incorporated wholesale or "jot-for-
jot." Rogers v. Tennessee, 532 U.S. 451 (2001) ("The Ex Post Facto Clause, by its
43
Society for the Propagation of the Gospel v. Wheeler, 22 F. Cas. 756,767 (C.C.D.N.H. 1814) (No.
13,156) (we have modified the tense of Story's verbs).
44
U.S. Const. art. I, § 9, cl. 3; § 10, cl. 1. See, e.g., Stogner v. California, 539 U.S. 607 (2003) (per
Breyer, J.)
45
U.S. Const. amend. V; amend. XIV, § 1. See, e.g., Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15
(1976) (per Marshall,].). But see United States v. Carlton, 512 U.S. 26, 39 (1994) (Scalia, J., concurring
in the judgment).
46
U.S. Const. amend. V. See, e.g., Eastern Enters. v. Apfel, 524 U.S. 498 (1998) (per O'Connor,].).
47
U.S. Const. art. I,§ 10, cl. 1.; See Land Use Restriction Agreement, R., Vol II at 666; See also, e.g.,
United States Trust Co. of N.Y. v. New jersey, 431 U.S. 1, 32 (1977) (per Blackmun, J.).
48
Constitution of the State of Colorado, art. II, §11
[27]
own terms, does not apply to courts.")
Therefore, the prohibition of the ex post facto application of judicial
decisions is less extensive than the prohibition of ex post facto statutes.49 The
Rogers Court distilled the ex post facto test for judicial opinions into the
following: "Due process limitations on the retroactive application of judicial
interpretations of criminal statutes" only apply to those decisions "that are
'unexpected and indefensible by reference to the law which had been expressed
prior to the conduct in issue.'" 532 U.S. at 461.
The Supreme Court held that judicial expansion beyond the plain language
violated due process principles of fair warning when retroactively applied. Id. at
352-55, 363; see also Marks v. United States, 430 U.S. 188 (1977) at 196 (holding
that although statutory language was not narrow or precise, judicial creation of
new standards governing obscenity was unexpected and violated the fair
warning principle of due process when applied retroactively).
The Tenth Circuit has provided guidance to the text of the note in applying
the ex post facto principles of Marks, Bouie, and Rogers by formulating a two-
pronged inquiry. Evans v. Ray, 390 F.3d 1247 (10th Cir 2004). First, the Court
discerns whether the statute is "narrow and precise" on its face. Hawkins v.
49
See Wayne R. LaFave, Substantive Criminal Law § 2.4(c) (2d ed. 2003).
[28]
Mullin, 291 F.3d 658, 665 (10th Cir. 2002), cert. denied, 537 U.S. 1173, 154 L. Ed.
2d 916, 123 S. Ct. 1012 (2003) (citing [**11] McDonald v. Champion, 962 F.2d
1455, 1458-59 (10th Cir. 1992) (quotation omitted)). If so, "any judicial
expansion of that statute beyond its own terms will be considered
unforeseeable." (quotation omitted). Second, if the statute is not so clearly drawn
on its face, we ask "'whether the [state court's] construction is so unexpected and
indefensible by reference to the law which had been expressed prior to the
conduct at issue as to prevent its application retroactively.'" Id. at 666 (quoting
McDonald, 962 F.2d at 1458) (alteration in original).
24 CFR §5.609(b)(2) provides narrow and precise instruction.50 Also,
none of the trial court’s novel conditions appear in IRC §42, 24 CFR §5.609, or in
the CHFA LIHTC Manual. Additionally, this rule does not appear in the record
and is being retroactively applied approximately two years after the initial
housing application submission. Accordingly, the district court’s judicial
expansion of the statute is unexpected and indefensible. Even if the district
court’s novel conditions were permissible, the IRS Schedule C (Form 1040)
includes a listing of business expenses that would satisfy this condition. See R.,
Vol II at 624.51 Absent this facially unconstitutional ex post facto rule, Mr. Giles
50
See R., Vol II at 1256
51
IRS Schedule C (Form 1040) - Part II entitled “Expenses”
[29]
qualified for the housing unit under IRC §42, thus, Alto Partner failed to provide a
legally sufficient rationale to discharge its initial burden of production.
C. Alto Partners Failed to Affirmatively Demonstrate Lack of
Evidence
If the burden of persuasion at trial would be on the nonmoving party, the
party moving for summary judgment may satisfy Rule 56's burden of production
in either of two ways. Celotex Corp. v. Catrett, 477 U.S. 317; (1986) (Brennan, J,
dissenting). First, the moving party may submit affirmative evidence that
negates an essential element of the nonmoving party's claim. Second, the moving
party may demonstrate to the court that the nonmoving party's evidence is
insufficient to establish an essential element of the nonmoving party's claim. See
10A Wright § 2727, pp. 130-131.
Plainly, a “conclusory assertion” that the nonmoving party has no evidence
is insufficient. Celotex, 477 U.S. 317. The moving party must “affirmatively
demonstrate” that there is no evidence in the record to support a judgment for
the nonmoving party. Id.
Besides negatively weighing evidence, the trial court did not demonstrate
how Mr. Giles’ evidence was insufficient. Mr. Giles was deposed by Alto
[30]
Partners,52 deposed Marcia Bross,53 and provided the court with an affidavit
verifying material facts, such as an annual income of $35,000. See R., Vol II at
1024. Neither Alto Partners nor the trial court negated or showcased that the
evidence is insufficient. Instead, the trial court ignored and improperly
discounted these essential evidential elements that formed the basis of its
conclusory assertions.
Furthermore, if the moving party has not fully discharged this initial
burden of production, its motion for summary judgment must be denied, and the
court need not consider whether the moving party has met its ultimate burden of
persuasion. Celotex, 477 U.S. 317 (Brennan, J, dissenting). Accordingly, the
nonmoving party may defeat a motion for summary judgment that asserts that
the nonmoving party has no evidence by calling the court's attention to
supporting evidence already in the record that was overlooked or ignored by the
moving party. Id.
The district court selectively acknowledged elements from depositions,
affidavits, material facts, and compelled documents that sustained its assertions.
However, the same records used to deny Mr. Giles’ prima facie case contain
evidence of housing qualification under IRC §42. Most notably, the district court
52
See R., Vol II at 160
53
See R., Vol II at 1398
[31]
acknowledged the $27,500 and $29,500 in wages reported on Line 26 of the
2016 and 2017 IRS Schedule C (Form 1040), respectively. Yet, the gross sales of
$35,000 and $34,125 reported on Line 1 of the 2016 and 2017 IRS Schedule C
(Form 1040) were ignored. Accordingly, absent such demonstration of
insufficiency of evidence, the summary judgment should have been denied on the
grounds that Alto Partners had failed to meet its burden of production under
Rule 56.
II. THERE IS SUFFICIENT EVIDENCE IN THE RECORD TO CREATE A
GENUINE ISSUE OF MATERIAL FACT
Assuming Section 42 of the Internal Revenue Code is statutorily
permissible, then the income determination method declared under IRC §42(g)
and further promulgated by 24 CFR §5.609 is governing law. Accordingly, it is a
genuine issue of material fact whether Line 1 ($35,000) designated as “Income”
or Line 26 ($27,500) designated as “Expenses” reported on the 2016 IRS
Schedule C (1040) is permissible. See Brown v. Parker-Hannifin Corp., 746 F.2d
1407, 1411 (10th Cir. 1984) ("Where different ultimate inferences may be drawn
from the evidence presented by the parties, the case is not one for summary
judgment.").
Cornerstone to Alto Partners’ defense is that Mr. Giles’ 2016 financial
records submitted on October 23, 2017 and December 4, 2017 were insufficient
[32]
and unverifiable. Therefore, the trial court concluded Alto Partners was required
to demand 2017 financial records, not to unlawfully increase terms and
conditions, but to satisfy policy. The trial court discounted the deposition of Mr.
Giles where Alto Partners explicitly stated there was a genuine issue over this
fact:
9 Q - She is giving you a second opportunity to
10 provide the relevant information, correct?
11 A - The information was already supplied.
12 Q - Again, that's under your position?
13 A That's a fact. That's in Exhibit 5.
14 Q - Okay. Again, the parties disagree on that, but
15 you're --
16 A - So you disagree that this information is not in
17 Exhibit 5?
See R., Vol II at 192. Other genuine issues of material fact are apparent from the
depositions conducted and submitted affidavits during the proceedings, in
particular; 1) whether the gross sales reported on Line 1 of the IRS Schedule C
(Form 1040)54 and page 3 of the IRS Transcripts55 qualifies as “annual income,”
and 2) whether expenses for business expansion are to be deducted.56 Each of
these compelling and undisputed material facts determine whether Mr. Giles
54
See R., Vol II at 624; for tax year 2017, see also R., Vol II at 695
55
See R., Vol II at 691; for tax year 2017, see also Plaintiff-Appellant’s Motion for Judicial Notice, Ex.
A.
56
24 CFR 5.609(b)(2)
[33]
established his prima facie case by qualifying for housing. Thus, these factors are
essential and not a mere scintilla of evidence in hopes to create a factual dispute.
Specifically, these facts are material because the legal sufficiency of the
alleged facts could only be decided in Alto Partners favor on the assumption that
they are not true.57 Moreover, Mr. Giles asserts that the district court should
have considered his affidavit in its ruling on summary judgment, pursuant
Federal Rule of Civil Procedure 37(c)(1). Accordingly, there are genuine issues of
material fact that preclude the entry of summary judgment against Mr. Giles’
claim of intentional discrimination under the Fair Housing Act, 42 U.S.C. §§ 3601-
3619.
A. The District Court Made all Inferences in Favor of the Moving Party
In holding that the record contained insufficient evidence to sustain a
jury's verdict, the district court misapplied the standard of review dictated by
Rule 56. Principally, the court disregarded critical evidence favorable to Mr.
Giles -- namely, the evidence supporting Mr. Giles’ prima facie case and,
subsequently, undermining Defendant-Appellee’s nondiscriminatory
57
See, e.g., Burkevich v. Air Line Pilots Ass'n, 894 F.2d 346,352 (9th Cir. 1990)
[34]
explanation. See R., Vol II at 102. Finally, the district court failed to draw all
reasonable inferences in his favor.58
While entertaining a motion for judgment as a matter of law, the court
should review all evidence in the record. In doing so, however, the court may not
make credibility determinations or weigh the evidence. Lytle v. Household Mfg.,
Inc., 494 U.S. 545 (1990). Recognizing that "the question facing triers of fact in
discrimination cases is both sensitive and difficult," and that "there will seldom
be 'eyewitness' testimony as to the employer's mental processes," Postal Service
Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983).
i. The District Court Discounted Evidence Supporting a Prima Facie
Case
The trial court discounted the evidence supporting Mr. Giles’ prima facie
case and challenging Alto Partners’ explanation for its decision to deny housing.
See R., Vol II at 624. The court confined its review of evidence favoring Plaintiff-
Appellant to that evidence showing that Mr. Giles submitted all requested
verification documentation: certification forms, a business plan, a 2016 tax
return consisting of IRS Form 1040 and IRS Schedule C (Form 1040), and a 2016
profit and loss statement for his business. See R., Vol II at 108. It is therefore
58
Concrete Works of Colo., Inc. v. City and Cty. of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994) (“The
Court will examine the factual record and make reasonable inferences therefrom in the light most
favorable to the party opposing summary judgment.)
[35]
apparent that the court believed that only this evidence of the discriminatory
transaction would be relevant to a jury.
Line 26 of the 2016 IRS Schedule C (Form 1040)59 and page 4 of the 2016
IRS transcripts60 report wages of $27,500. This is undisputed. Line 1 of the 2016
IRS Schedule C (Form 1040)61 and page 3 of the 2016 IRS transcripts62 report
gross sales as “income” of $35,000. This has been wholly ignored. The minimum
income to qualify for housing was set at $34,020. See R., Vol II at 103.
Determining income based exclusively on wages disqualifies Mr. Giles for
housing, while interpreting gross sales of $35,000 as annual income qualifies Mr.
Giles for housing. Id.
Assuming IRC §42 is statutorily permissible, under 24 CFR §5.609, “annual
income” is defined as: “All amounts, monetary or not.”63 Further, the CHFA
LIHTC Manual describes annual income as “gross income.”64 See R., Vol II at 1322
¶2. Bypassing both annual income and gross income definitions, the trial court
made an inference in favor of Alto Partners by ignoring the gross sales of $35,000
to utilize a novel income determination method based on wages. "The evidence
59
See R., Vol II at 624
60
See R., Vol II at 694
61
See R., Vol II at 624
62
See R., Vol II at 693
63
See R., Vol II at 1256
64
GROSS - Undiminished by deduction; entire <gross profits>; Black's Law Dictionary (11th ed. 2019)
[36]
of the non-movant is to be believed, and all justifiable inferences are to be drawn
in his favor.” Anderson v Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)
ii. Wages Based Income Determination Method Cloaks Suspicion of
Mendacity
This critical inference to use a “wages” income determination method
served two purposes: 1) preclude Mr. Giles’ prima facie case, and 2) cloak any
suspicion of mendacity or disbelief of the reasons put forth by Alto Partners.
Assuming IRC §42 is statutorily permissible, then the income-based
determination method declared under IRC §42(g) and further promulgated by 24
CFR § 5.609 is binding. A textually permissible interpretation that furthers
rather than obstructs the purpose of IRC §42 should be favored.65 Accordingly,
Alto Partners’ “wages” based explanation for the housing denial is void of
credence. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000) (“the trier of
fact can reasonably infer from the falsity of the explanation that the employer is
dissembling to cover up a discriminatory purpose. Such an inference is
consistent with the general principle of evidence law that the factfinder is
entitled to consider a party's dishonesty about a material fact as "affirmative
evidence of guilt.")
65
Citium Bank of Bryan v. First State Bank, 580 S.W.2d 344, 348 (Tex. 1979). (if the "language is
susceptible of two constructions, one of which will carry out and the other defeat [its] manifest object,
[the statute] should receive the former construction.”)
[37]
These inferences in favor of Alto Partners continued. For instance, while
acknowledging that Mr. Giles “was paying himself a salary of $27,500 from his
business’s gross income,” the trial court disregarded the amount of his “business’
gross income.”66 Furthermore, the court acknowledged that the "$27,500
amount"67 of gross wages reported on the IRS Schedule C (Form 1040), however,
the court discounted both the gross sales and wages reported on the IRS
Schedule C (Form 1040) stating that they could not be verified them on the
ground that they "did not appear on Mr. Giles’ personal tax forms, ACHA could
not verify this amount as Mr. Giles’ reported $27,500 in income." See R., Vol II at
112 ¶1.
Furthermore, the court inferred a distinction, in the context of income
verification, between IRS Form 1040 and IRS Schedule C (Form1040). If words
are to be understood in their ordinary everyday meanings, unless the context
indicates that they bear a technical sense,68 then this inference is contrary to the
plain language of CHFA LIHTC Manual.69 Both IRS Form 1040 and IRS Schedule C
(Form 1040) are not only verifiable but required documents.
66
See R., Vol II at 112 ¶1
67
Id.
68
James Kent, Commentaries on American Law 432 (1826) ("The words of a statute are to be taken in
their natural and ordinary signification and import; and if technical words are used, they are to be taken in
a technical sense.")
69
See R, Vol II at 467 (“All attempts to obtain verification must be documented. Acceptable forms of
verification for specific types of income include are as follows.”)
[38]
Specifically, CHFA, IRS70 and HUD all mandate the verifiability of IRS
Schedule C (Form 1040). Explicitly, Section 3.18 of the CHFA LIHTC Manual71
provides: “All attempts to obtain verification must be documented. Acceptable
forms of verification for specific types of income include are as follows.” Section
3.18(B)72 explicitly lists IRS Schedule C (Form 1040) as an acceptable form of
verification: “The tax return must include IRS Form 1040 and Schedule C.”
Strangely, the trial court acknowledges the necessity of both documents. See R.,
Vol II at 113 ¶2.
An income determination inquiry pursuant to IRC §42 should have
stopped by interpreting Mr. Giles’ gross sales of $35,00073 as qualifying as annual
income under 24 CFR § 5.609. Nevertheless, pursuing income determination
inquiry based on deductions from gross sales (Line 1 of the Schedule C), arrives
at the same total household income result, $35,000.
Once the $27,500 of wages (Line 26)74 is deducted from gross sales of
$35,000, the record provides that Mr. Giles invested the remaining $7,500 in to
expenses related to expanding his business.75 24 CFR §5.609(b)(2) provides
70
See R., Vol II at 1263 & 1264
71
See R., Vol II at 467
72
See R., Vol II at 1194
73
See R., Vol II at 624
74
Id.
75
See R., Vol II at 559 ¶14.
[39]
narrow and precise instruction: “Expenditures for business expansion or
amortization of capital indebtedness shall not be used as deductions in
determining net income.” (emphasis added.) See R., Vol II at 790.
The trial court acknowledged that the statute is mirrored in the CHFA
LIHTC Compliance Manual Section 3.9: “You may not deduct: interest on loans or
other expenses for business expansion.” See R., Vol II at 112 ¶3. Accordingly, the
$7,500 for business expansion must be added to the gross wages of $27,500,
totaling $35,000. Therefore, adhering to this narrow and precise language 1)
establishes Mr. Giles’ prima facie case, and 2) demonstrates the fundamental
falsity of Alto Partners’ nondiscriminatory explanation.
FY 2016 FY 2017
Gross Sales (Income) $35,000.00 $34,125.00
Net Income from business activities (997) (5,841)
76If negative use $0.00 $0.00 $0.00
+ +
Gross Wages $27,500.00 $29,500.00
+ +
Expenses for business expansion $7,500.00 $4,625.00
= =
Annual Income $35,000.00 $34,125.00
Maximum Annual Income Threshold $35,280.00 $35,280.00
Minimum Annual Income Threshold $34,020.00 $34,020.00
Income Qualified? Yes Yes
76
HUD Occupancy Handbook, 4350.3, Ch 5 §5-6(H)(3)
[40]
However, in 2016 and 2017, the trial court discounted the evidence that
the $7,500 for business expansion expenses must be added to the $27,500 in
wages, and $4,625 for business expansion expenses must be added to the
$29,500 in wages, respectively. “But Mr. Giles did not provide ACHA with
documentation that $7,500 of his business gross earnings were used for business
expansion at the time he applied.” (emphasis added.) See R., Vol II at 113. This
novel provision injected by the trial court is not discussed or implied by statute
or policy. Nothing is to be added to what the text states or reasonably implies
(casus omissus pro omisso habendus est). The absent provision cannot be supplied
by the courts.77 Further, the trial court made a key inference in favor of Alto
Partners, “ACHA likely did not account for business expansion in their
calculations because they didn’t have any reason to do so.” See R., Vol II at 113.
Even if Congress would have wanted the novel provision, it did not
provide, and that is an end of the matter. As Justice Louis Brandeis put the point:
77
See jones v. Smart, [1785] 1 Term Rep. 44, 52 (per Buller,].) ("[W]e are bound to take the act of
parliament, as they have made it: a casus omissus can in no case be supplied by a Court of Law, for that
would be to make laws.") (emphasis added); MacMillan v. Director, Div. of Taxation, 434 A.2d 620, 621
(N.J. Super. Ct. App. Div. 1981) ( We certainly may not supply a provision no matter how confident we
are of what the Legislature would do if it were to reconsider today."). See also Frank Easterbrook,
Statutes' Domains, 50 U. Chi. L. Rev. 533, 548 (1983) (Judicial Interpretation of legislative gaps would
be questionable even if judges could ascertain with certainty how the legislature would have acted. Every
legislative body’s power is limited by a number of checks .... The foremost of these checks is time … The
unaddressed problem is handled by a new legislature with new instructions from the voters.").
[41]
"A casus omissus does not justify judicial legislation."78 And Brandeis again: "To
supply omissions transcends the judicial function."79
iii. Alto Partners’ Manifestation of Protected Class Status
Another critical example of the trial court drawing inferences in favor of
the moving party involves Alto Partners’ manifestation of protected class status.
The trial court recognized the evidence that Zachary Guerin, director of property
operations, stated: “We have not and will not override this based on any
protected class …” See R., Vol II at 846. The record does not support that Mr.
Giles requested the housing application be accepted based on protected class
status. More accurately, Mr. Giles requested his application be evaluated by
statutory provisions, “annual income” or “gross” income. Contrarily, Alto
Partners injected protected class status.
More importantly, the district court confined its view of the protected class
comment in the context of a permissible “wages” income determination method
that shields Alto Partners from any suspension of mendacity. Further, the trial
court proceeded to give weight to the fact that “the evidence presented by Alto
strongly supports its position that there was no discrimination against Mr. Giles
based on his race.” See R., Vol II at 110. The trial court then discounted the
78
Ebert v. Poston, 266 U.S. 548, 554 (1925) (per Brandeis, J.).
79
Iselin v. United States, 270 U.S. 245, 251 (1926) (per Brandeis, J.).
[42]
protected class comment on the ground that: “In short, the evidence presented
on this issue does not raise a genuine dispute of material fact.” Id. "Credibility
determinations, the weighing of the evidence, and the drawing of legitimate
inferences from the facts are jury functions, not those of a judge." Anderson v
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).
Further, the trial court confined its review of evidence favoring Mr. Giles to
Guerin’s use of protected class comments. The record provides that Niki Rush,
compliance manager stated: “I'm sure he will not qualify even if he filed his taxes
according to the law.” See R., Vol II at 900. The court should review the record as
a whole, it must disregard all evidence favorable to the moving party that the
jury is not required to believe. See Wright & Miller 299. That is, the court should
give credence to the evidence favoring the nonmovant as well as that "evidence
supporting the moving party that is uncontradicted and unimpeached, at least to
the extent that that evidence comes from disinterested witnesses." Id. at 300.
Therefore, upon eliminating the factually false argument that Mr. Giles failed to
qualify for housing, absent protected class status, the record does not provide for
other factors to sustain the housing denial. Accordingly, this implausibility
demonstrates pretext of discriminatory intent.
[43]
iv. Mr. Giles Never Refused to Submit Verification Documents
The trial court acknowledges the policy requirement for a year-to-date
profit and loss statement and Mr. Giles’ 2016 annualized year-to-date profit-and-
loss statement. See R., Vol II at 113. At the time of submission December 4, 2017,
the most recent annual year-to-date profit and loss statement was 2016. The
trial court discounts this permissible evidence in favor of Alto Partners by
narrowly construing year-to-date profit and loss statement durations to preclude
annualized financial records, providing: “To meet the CHFA requirements, when
Mr. Giles applied in November 2017 he would have had to submit a year-to-date
profit and loss statement covering January through November of 2017.” Id.
Despite being facially ex post facto, this inference was made solely in favor
of the moving party and is contrary to evidence within the record. Specifically,
U.S. Department of Housing and Urban Development (HUD) has provided
guidance on permissible profit and loss statement durations for self-employed
individuals. HUD provides that annual or quarterly profit and loss statements
are permissible. See R., Vol II at 896 & 897. See Glover v. Standard Fed. Bank, 283
F.3d 953, 961–63 (8th Cir. 2002) (denying Chevron deference to HUD Statements
of Policy but deferring to them as “determinative authority” nonetheless).
[44]
Strikingly, the trial court did not sanction the 2017 annual year-to-date profit
and loss statement to a similar fate.80
Moreover, after the trial court discounted the federal agency interpretation
subject to at least Skidmore 81deference, it then assigned greater deference to its
own profit and loss statement inference. This act negatively weighed the
Plaintiff-Appellant’s deposition82 and affidavit,83 both providing evidential
support for HUD guidance permitting annual profit and loss statements.
The trial court advances the notion that Mr. Giles continuously refused84 to
provide Alto Partners with 2017 financial records. No such “refusal” exists in the
record. However, the record does indicate that Mr. Giles was not in the
possession, custody or control of the 2017 profit and loss statement or 2017 tax
returns at the time of the initial request (January 10, 2018) and subsequent
follow up (January 17, 2018). See R., Vol II at 346. The nationally recognized
deadline to submit tax returns is April 15th. Further, the record provides that
Mr. Giles submitted records he possessed upon any Alto Partners request.
80
See R., Vol II at 109
81
Skidmore v. Swift,323 U.S. 134 (1944) (Interpretations of an administrative agency that do not
receive deference under Chevron or Auer are “entitled to respect” under Skidmore, but only to
the extent that those interpretations have “power to persuade.” Id.at587 (quoting Skidmore, 323
U.S. 134, 140 (1944)
82
See R., Vol II at 160
83
See R., Vol II at 558
84
refusal (15c) 1. The denial or rejection of something offered or demanded, Black's Law
Dictionary (11th ed. 2019)
[45]
This addresses the crux of this matter – whether Alto Partners increased
terms and conditions for occupancy in violation of 42 U.S.C. §3604(b). After
receiving permissible 2016 financial records,85 the trial court acknowledged that
Alto Partners demanded 1) 2017 financial records and 2) provided on two days
for Mr. Giles to satisfy these demands.86 These increases (two years of financial
records and 48-hour submission window) in terms and conditions are explicitly
prohibited87 and HUD has ruled that this behavior constitutes discriminatory
housing practices. See R., Vol II at 757. Not only did the trial court ignore
applying the “power to persuade” under Skidmore or any other “determinative
authority” to HUD guidance and the federal regulation, the trial court discounted
this evidence: “By requesting a 2017 year-to-date profit and loss statement ACHA
did not deviate from the CHFA Compliance Manual, but rather attempted to
comply with it.” See R., Vol II at 114.
B. Alto Partners’ Changing Positions are Subject to Judicial Estoppel
Judicial estoppel is an equitable remedy used "to protect the integrity of
the judicial process by prohibiting parties from deliberately changing positions
according to the exigencies of the moment." New Hampshire v. Maine, 532 U.S.
85
See R., Vol II at 611
86
See R., Vol II at 113
87
24 CFR § 100.65
[46]
742, (2001) (citation and internal quotation marks omitted). "Where a party
assumes a certain position in a legal proceeding, and succeeds in maintaining
that position, he may not thereafter, simply because his interests have changed,
assume a contrary position, especially if it be to the prejudice of the party who
has acquiesced in the position formerly taken by him." Id. at 749 (brackets and
internal quotation marks omitted).
In determining whether to judicially estop a party, courts typically
examine three factors. First, has the party taken a position that is "clearly
inconsistent with its earlier position"? Id. at 750 (internal quotation marks
omitted). Second, would judicial acceptance of the later position create the
impression "that either the first or the second court was misled"? Id. (internal
quotation marks omitted). And third, would allowing the party to change its
position give it "an unfair advantage or impose an unfair detriment on the
opposing party if not estopped"? Id. at 751. The ultimate issue is whether
"considerations of equity persuade [the court] that application of judicial
estoppel is appropriate." Id. at 755.
In the instant matter, Alto Partners acknowledged Mr. Giles’ earned
income of $35,000, thus, would satisfy the $34,020 housing criteria. See R., Vol II
at 664. This is consistent to the testimony of Mr. Giles.
THE COURT: So he's got to have $30,000 of income, something like that.
[47]
MR. GUERIN: Correct, yes, sir. Yes, Your Honor.
THE COURT: Do you have it?
MR. GILES: Yes.
THE COURT: Okay. Tell us about it. What's your income?
MR. GILES: My income for 2016 was 35,000.
See R., Vol II at 307. Only after the protected activity on January 12, 201888, Alto
Partners shifted its acknowledgment from “earnings” of “$35,000” to a housing
denial rationale based exclusively on the negative business net income. See R.,
Vol II at 286. If a tenant has negative net income, how can they pay the rent? The
court acknowledged this fallacy. See R., Vol II at 305 ¶7. Then, Alto Partner
shifted its rationale that focused exclusively on business net income to an
analysis based on “wages” and lack of verifiable tax forms. See R., Vol II at 283.
Ultimately, Alto Partners testified that the use of the $27,500 in wages was based
upon “discrepancies”:
THE COURT: Well, he declares income, right?
MR. GUERIN: Yes. And, Your Honor, I just did the math. It would be
$34,020 that would be needed to suffice that amount.
THE COURT: Well, he probably makes that. He made that last year.
MR. GUERIN: So from the records we got, it showed --
MR. ROBINSON: 27,500. Part of the problem, Your Honor, is that during
the application process, he submitted various income verification forms
that -- there were discrepancies throughout the -- the verification forms
that he provided. So, for example, he said at one point it was 35,000. I
believe at one point he said it was 27,500.
88
See R., Vol II at 257
[48]
See R., Vol II at 308 ¶5. In its declaration,89 Alto Partners asserted that these
alleged “discrepancies” in the housing application material justified its increase
in terms and conditions for occupancy. See R., Vol II at 415 ¶17. The CHFA
Manual mandates income verification based on the IRS Form 1040 and IRS
Schedule C (Form 1040), not housing application material. See R., Vol II at 1194.
This non-discriminatory rationale departs from policy. Further, this change in
Alto Partners’ position gave it "an unfair advantage” and imposed an “unfair
detriment” because it was not estopped.
However, Alto Partners acknowledged the fallacy of this red herring and
shifted its rationale to: 1) ignore gross sales of $35,000 reported on Line 1 of the
Schedule C (Form 1040) and page 3 of the IRS transcripts90 asserting that there
are multiple income determination methods based on the “employment status”
of an applicant (See D.C. - ECF No. 75 at 2 ¶1); and 2) to undermine the
verifiability of the IRS Schedule C (Form 1040). Congress did not draft multiple
income determination methods based on employment status, rather it specified
“income” under IRC §42(g) that has been further promulgated under 24 CFR
§5.609. Cherry picking from the IRS Schedule C (Form 1040) to acknowledge
wages (line 26), yet ignore gross sales (Line 1), only then to turn around and
89
See R., Vol II at 410
90
See R., Vol II at 693
[49]
label the entire IRS Schedule C (Form 1040) as non-verifiable when the form is
mandated by policy91 demonstrates dishonesty about material facts. Thus,
“affirmative evidence of guilt.” See c Reeves v. Sanderson Plumbing Products, Inc.,
530 U.S. 133 (2000)(…“consistent with the general principle of evidence law that
the factfinder is entitled to consider a party's dishonesty about a material fact as
'affirmative evidence of guilt.'”)
Since the CHFA Manual mandates both “IRS Form 1040 and Schedule C,”
ignoring Line 1 of the 2016 IRS Schedule C (Form 1040) departs from policy
outlined in the CHFA Manual. In its ruling, the district court acquiesced to this
nonsensical notion. See Village of Arlington Heights v. Metropolitan Housing
Development Corp.,429 U.S. 252 (1977) (“departures from the normal procedural
sequence” of decision-making, and provides useful evidence of discriminatory
intent.) Thus, absent judicial estoppel, these disturbing oscillations not only
define inconsistency, but have undermined the “integrity of the judicial process”
and have permitted Alto Partners to “deliberately [change] positions according
to the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742 (2001)
(citation and internal quotation marks omitted).
91
Section 3.18 of the CHFA LIHTC Manual provides: “All attempts to obtain verification must
be documented. Acceptable forms of verification for specific types of income include are as
follows.” Section 3.18(B) explicitly lists IRS Schedule C (Form 1040) as an acceptable form of
verification: “The tax return must include IRS Form 1040 and Schedule C.”
[50]
The court consistently makes the inference that gross sales are precluded
from “annual income” under 24 CFR §5.609 and gross income under CHFA LIHTC
Manual Section 3.6. The record provides that this notion only perpetuates only
after the protected activity on January 12, 2018. See R., Vol II at 561 ¶22. Prior to
the protected activity, Zachary Guerin, director of property operations,
acknowledged Mr. Giles’ 2016 annual income of $35,000. See R., Vol II at 664.
Absent judicial estoppel, Alto Partner declared the $27,500 in wages to be Mr.
Giles gross income.
III. THE DISTRICT COURT’S EX POST FACTO RULE DEMONSTRATES
PRETEXT
Section 5.609(b)(2) provides narrow and precise instruction:
“Expenditures for business expansion or amortization of capital indebtedness
shall not be used as deductions in determining net income.”92 (emphasis added)
This notion is mirrored in the CHFA LIHTC Manual, specifically, Section 3.9
states, “You may not deduct: interest on loans or other expenses for business
expansion.” See R., Vol II at 858.
The trial court interpreted Section 5.609(b)(2) as: “But Mr. Giles did not
provide ACHA with documentation that $7,500 of his business gross earnings
were used for business expansion at the time he applied.”93 (emphasis added.)
92
See R., Vol II at 1256
93
See R., Vol II at 113 or ECF No. 82, p.12
[51]
The impact of a neutral policy or practice can be used as evidence of intentional
discrimination. Claims of intentional discrimination can be based on facially
neutral laws or practices. See Personnel Adm'r of Massachusetts v. Feeney, 442 U.S.
256, 272, 60 L. Ed. 2d 870, 99 S. Ct. 2282 (1979) ("As we made clear in
Washington v. Davis, 426 U.S. 229, 48 L. Ed. 2d 597, 96 S. Ct. 2040 (1976) and
Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 50 L. Ed. 2d 450, 97 S.
Ct. 555 (1977), even if a neutral law has a disproportionately adverse effect upon
a racial minority, it is unconstitutional under the Equal Protection Clause only if
that impact can be traced to a discriminatory purpose.")(emphasis added).
The district court’s novel terms and conditions were not applied
universally, instead the provision solely targeted an African American – Mr. Giles.
Not only is this “unconstitutional under the Equal Protection Clause,” this is
facially discriminatory, and demonstrates that “discrimination was a primary
factor” in the creation of the new terms and conditions, thus establishing pretext.
Since this ex post facto rule is one in a series of terms and conditions used as
barriers to housing qualification against a black person, it is probative of the
intent behind their use. See Reno v. Bossier Parish School Bd. 520 U.S. 471 (1997)
("The impact of an official action is often probative of why the action was taken
in the first place since people usually intend the natural consequences of their
actions.").
[52]
CONCLUSION
Given that Mr. Giles established a prima facie case, introduced enough
evidence for a jury to reject Alto Partners’ explanation, produced additional
evidence that Alto Partners manifested protect class factors, and erected and
retroactively applied ex post facto terms and conditions, there is sufficient
evidence for the jury to conclude that Alto Partners had intentionally
discriminated. Therefore, in concluding that Alto Partners’ explanations so
overwhelmed the evidence favoring Mr. Giles that no rational trier of fact could
have found that Mr. Giles was denied housing because of his race, the district
court impermissibly substituted its judgment concerning the weight of the
evidence for the jury's.
Accordingly, this Court should reverse the district court’s order, and
remand the case to the district court for further proceedings.
Respectfully submitted,
Dated this 9th day of December 2019.
SAMUEL K. GILES
/s/ Samuel K. Giles
3160 W. 71st Avenue, Apt. 307
Westminster, Colorado 80030
(419) 699-5600
skgiles@gmail.com
Pro Se Plaintiff-Appellant.
[53]
STATEMENT ON ORAL ARGUMENT REQUEST
Plaintiff-Appellant moves pursuant to F.R.A.P. Rule 34(a) to place this case
on the argument calendar. This case meets the standards in Rule 34(a)(2) for
oral argument, in that (a) this appeal is not frivolous, (b) the dispositive issues
raised in this appeal have not been reasonably or authoritatively decided, and (c)
as described in the accompanying memorandum, the decisional process would
be significantly aided by oral argument.
CERTIFICATE OF PRIVACY REDACTIONS
I hereby certify pursuant to 10th Circuit Court of Appeals CM/ECF User’s
Manual Section II(J)(a), that I made all the required privacy redactions as
required by Fed. R. App. P. 25(a)(5) and 10th Cir.R.25.5.
Dated this 9th day of December 2019.
SAMUEL K. GILES
/s/ Samuel K. Giles
3160 W. 71st Avenue, Apt. 307
Westminster, Colorado 80030
(419) 699-5600
skgiles@gmail.com
Pro Se Plaintiff-Appellant.
[54]
CERTIFICATE OF COMPLIANCE WITH
FEDERAL RULE OF APPELLATE PROCEDURE 32(a)
This brief complies with the type-volume limitation of Federal Rule of
Appellate Procedure 32(a)(7)(B) because this brief contains 11,395 words,
excluding the parts of the brief exempted by Federal Rule of Appellate Procedure
32(a)(7)(B)(iii).
This brief complies with the typeface requirements of Federal Rule of
Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of
Appellate Procedure 32(a)(6) because this brief has been prepared in a
proportionally spaced typeface using Microsoft Word in 13-point Cambria font.
Dated this 9th day of December 2019
SAMUEL K. GILES
/s/ Samuel K. Giles
3160 W. 71st Avenue, Apt. 307
Westminster, Colorado 80030
(419) 699-5600
skgiles@gmail.com
Pro Se Plaintiff-Appellant.
[55]
CERTIFICATE THAT HARD COPIES
ARE THE SAME AS CM/ECF SUBMISSIONS
I hereby certify, pursuant to 10th Circuit Court of Appeal CM/ECF User’s
Manual Section II(J)(b), as follows: That the hard copy of the Brief of Appellant
submitted to the Clerk’s Office in hard copy is an exact copy of the Brief of
Appellant filed using CM/ECF.
Dated this 9th day of December 2019.
SAMUEL K. GILES
/s/ Samuel K. Giles
3160 W. 71st Avenue, Apt. 307
Westminster, Colorado 80030
(419) 699-5600
skgiles@gmail.com
Pro Se Plaintiff-Appellant.
[56]
CERTIFICATE OF SCANNING OF CM/ECF SUBMISSION FOR VIRUSES
I hereby certify, pursuant to 10th Circuit Court of Appeals CM/ECF User’s
Manual Section II(J)(c), as follows:
That this and all digital submissions have been scanned for viruses with
McAfee Security Scan Plus Version 3.11.717.1, updated May 25, 2018.
Respectfully submitted,
Dated this 9th day of December 2019.
SAMUEL K. GILES
/s/ Samuel K. Giles
3160 W. 71st Avenue, Apt. 307
Westminster, Colorado 80030
(419) 699-5600
skgiles@gmail.com
Pro Se Plaintiff-Appellant.
[57]
CERTIFICATE OF SERVICE
I hereby certify that on the 9th day of December 2019, a true and correct
copy of the foregoing was served upon the persons named below, pursuant to
Fed. R. App. P. 25(c)(1)(D) and 25(c)(2), as authorized by 10th Cir. Rule 25.4, via
email to the address listed below. The ECF Filing Status of counsel named below
is listed as “Active” by the Court’s CM/ECF system and registration constitutes
consent to service under 10th Cir. Rule 25.4 and CM/ECF User Manual at Section
II(E)(1).
Jason Robinson
Fairfield and Woods, P.C.
1801 California Street
Denver, CO 80202
jrobinson@fwlaw.com
Lee Katherine Goldstein
Fairfield and Woods, P.C.
1801 California Street
Denver, CO 80202
lgoldstein@fwlaw.com
SAMUEL K. GILES
/s/ Samuel K. Giles
[[ This Page is Intentionally Left Blank ]]
Statutory Addendum - 1
STATUTORY ADDENDUM
FEDERAL STATUTES
42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968)..............................................1
42 U.S.C.S. § 3604(a) (Fair Housing Act of 1968 –Refusal to Rent / Deny )…..…………….....3
42 U.S.C.S. § 3604(b) (Fair Housing Act of 1968 – Terms & Conditions)…………………….....4
42 U.S.C.S. § 3604(d) (Fair Housing Act of 1968 – Misrepresentation)………………………....4
42 U.S.C.S. § 3617 (Fair Housing Act of 1968 – Retaliation & Interference).……………….....6
IRC §42 (g)(4)…..…............................................................................................................................................8
IRC §42 (i)(3)(A)…............................................................................................................................................8
IRC §42 (i)(7)…..….............................................................................................................................................8
IRC §142 (d)(2)(B)...........................................................................................................................................8
FEDERAL REGULATIONS
24 CFR Section 5.609 - Annual Income……………………………………………………………..……….10
24 CFR Section 5.609 (a)(1)………………………………………………………………………………….…10
24 CFR Section 5.609 (a)(4)……………………………………………………………………………………..10
24 CFR Section 5.609 (b)(2)……………………………………………………………………………………..10
24 CFR Section 100.65 (Discrimination in Terms & Conditions)………………………………...11
Treasury Regulation Section 1.42-5(b)(1)(vii)…………………………………………………………12
Statutory Addendum - 2
42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968)
§3602. Definitions
As used in this subchapter—
(a) “Secretary” means the Secretary of Housing and Urban Development.
(b) “Dwelling” means any building, structure, or portion thereof which is occupied as, or
designed or intended for occupancy as, a residence by one or more families, and any vacant
land which is offered for sale or lease for the construction or location thereon of any such
building, structure, or portion thereof.
(c) “Family” includes a single individual.
(d) “Person” includes one or more individuals, corporations, partnerships, associations, labor
organizations, legal representatives, mutual companies, joint-stock companies, trusts,
unincorporated organizations, trustees, trustees in cases under title 11, receivers, and
fiduciaries.
(e) “To rent” includes to lease, to sublease, to let and otherwise to grant for a consideration the
right to occupy premises not owned by the occupant.
(f) “Discriminatory housing practice” means an act that is unlawful under section 3604, 3605,
3606, or 3617 of this title.
(g) “State” means any of the several States, the District of Columbia, the Commonwealth of
Puerto Rico, or any of the territories and possessions of the United States.
(h) “Handicap” means, with respect to a person—
(1) a physical or mental impairment which substantially limits one or more of such
person's major life activities,
(2) a record of having such an impairment, or
(3) being regarded as having such an impairment, but such term does not include
current, illegal use of or addiction to a controlled substance (as defined in section 802 of
title 21).
(i) “Aggrieved person” includes any person who—
(1) claims to have been injured by a discriminatory housing practice; or
(2) believes that such person will be injured by a discriminatory housing practice that is
about to occur.
(j) “Complainant” means the person (including the Secretary) who files a complaint under
section 3610 of this title.
(k) “Familial status” means one or more individuals (who have not attained the age of 18 years)
being domiciled with—
(1) a parent or another person having legal custody of such individual or individuals; or
(2) the designee of such parent or other person having such custody, with the written
permission of such parent or other person.
The protections afforded against discrimination on the basis of familial status shall apply to any
person who is pregnant or is in the process of securing legal custody of any individual who has
not attained the age of 18 years.
Statutory Addendum - 3
(l) “Conciliation” means the attempted resolution of issues raised by a complaint, or by the
investigation of such complaint, through informal negotiations involving the aggrieved person,
the respondent, and the Secretary.
(m) “Conciliation agreement” means a written agreement setting forth the resolution of the
issues in conciliation.
(n) “Respondent” means—
(1) the person or other entity accused in a complaint of an unfair housing practice; and
(2) any other person or entity identified in the course of investigation and notified as
required with respect to respondents so identified under section 3610(a) of this title.
(o) “Prevailing party” has the same meaning as such term has in section 1988 of this title.
(Pub. L. 90–284, title VIII, §802, Apr. 11, 1968, 82 Stat. 81; Pub. L. 95–598, title III, §331, Nov. 6,
1978, 92 Stat. 2679; Pub. L. 100–430, §5, Sept. 13, 1988, 102 Stat. 1619.)
§3603. Effective dates of certain prohibitions
(a) Application to certain described dwellings:
Subject to the provisions of subsection (b) of this section and section 3607 of this title, the
prohibitions against discrimination in the sale or rental of housing set forth in section 3604 of
this title shall apply:
(1) Upon enactment of this subchapter, to—
(A) dwellings owned or operated by the Federal Government;
(B) dwellings provided in whole or in part with the aid of loans, advances, grants, or
contributions made by the Federal Government, under agreements entered into after
November 20, 1962, unless payment due thereon has been made in full prior to April
11, 1968;
(C) dwellings provided in whole or in part by loans insured, guaranteed, or otherwise
secured by the credit of the Federal Government, under agreements entered into after
November 20, 1962, unless payment thereon has been made in full prior to April 11,
1968: Provided, That nothing contained in subparagraphs (B) and (C) of this subsection
shall be applicable to dwellings solely by virtue of the fact that they are subject to
mortgages held by an FDIC or FSLIC institution; and
(D) dwellings provided by the development or the redevelopment of real property
purchased, rented, or otherwise obtained from a State or local public agency receiving
Federal financial assistance for slum clearance or urban renewal with respect to such
real property under loan or grant contracts entered into after November 20, 1962.
(2) After December 31, 1968, to all dwellings covered by paragraph (1) and to all other
dwellings except as exempted by subsection (b) of this section.
(b) Exemptions
Nothing in section 3604 of this title (other than subsection (c)) shall apply to—
(1) any single-family house sold or rented by an owner: Provided, That such private individual
owner does not own more than three such single-family houses at any one time: Provided
further, That in the case of the sale of any such single-family house by a private individual
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)
Giles v Alto Partners (Opening Brief)

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Giles v Alto Partners (Opening Brief)

  • 1. NO. 19-1381 UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT SAMUEL K. GILES, Plaintiff-Appellant, v. ALTO PARTNERS, LLLP, Defendant-Appellee. On Appeal from a Motion for Summary Judgment of the U.S. District Court for the District of Colorado (Honorable R. Brooke Jackson) BRIEF OF PLAINTIFF - APPELLANT (Corrected) Oral Argument Requested Samuel K. Giles Pro Se Plaintiff-Appellant WESTMINSTER, COLO. 80030 (419) 699-5600 ______________________________________________________________________
  • 2. ii TABLE OF CONTENTS Page TABLE OF AUTHORITIES …………………….………………..............................................................................iii STATEMENT OF PRIOR & RELATED APPEALS .........................................................................................v CORPORATE DISCLOSURE STATEMENT ……………….............................................................................. v GLOSSARY …………………………………………..……………….............................................................................. v LEGISLATIVE HISTORY ..……….……..…….………………..................................................................................1 INTRODUCTION …………………….……..…….………………..................................................................................2 STATEMENT OF JURISDICTION ……..…….……………….................................................................................5 STATUTES & REGULATIONS ………...…….………………...................................................................................5 ISSUES PRESENTED FOR REVIEW ……….……………….................................................................................6 STATEMENT OF THE CASE …………..…….………………...................................................................................6 STATEMENT OF THE FACTS ………..…….………………....................................................................................8 SUMMARY OF ARGUMENT ………..……….……………….................................................................................13 STANDARD OF REVIEW …….……..……….………………..................................................................................14 ARGUMENT …………………….….……..……….………………................................................................................16 I. Alto Partners Failed to Satisfy Its Burden of Production …………………………………….......18 A. Alto Partners Failed to Establish a Prima Facie Showing………………………………….19 B. Alto Partners Explanation is Legally Insufficient……………………………………………..20 i. Alto Partners’ “Wages” Based Income Determination Method is Inconsistent with IRC §42……………………………………………………………………………………………20 ii. IRS Schedule C (Form 1040) is a Verifiable Document……………………………….23 iii. The District Court’s Ex Post Facto Rule is Unconstitutional……………………….24 C. Alto Partners Failed to Affirmatively Demonstrate Lack of Evidence………………..29 II. There is Sufficient Evidence in the Record to Create a Genuine Issue of Material Fact…………………………………………………………………………..…31 A. The District Court Made All Inferences in Favor of the Moving Party……………..…33 i. The District Court Discounted Evidence Supporting a Prima Facie Case…….34 ii. Wages Income Determination Method Cloaks Suspicion of Mendacity……….36 iii. Alto Partners’ Manifestation of Protected Class Status ……………………………..41 iv. Mr. Giles Never Refused to Submit Verification Documents……………….………43 B. Alto Partners’ Changing Positions are Subject to Judicial Estoppel…………….…….45 III. The District Court’s Ex Post Facto Rule Demonstrates Pretext……………………….………50 CONCLUSION………………………….......................................................................................................................52
  • 3. iii TABLE OF AUTHORITIES CASES Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-161 (1970) …………………………………………………18 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986) ………………………………15, 18, 36, 42 Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252 (1977) ……………………………….49, 51 Argentina v. Weltover, Inc., 504 U.S. 607,618 (1992) …………………………………………………….25 Asbury v. Brougham, 866 F.2d 1276, (10th Cir. 1989) …………………………………………….………15 Brown v. Parker-Hannifin Corp., 746 F.2d 1407, 1411 (10th Cir. 1984) ………………………….31 Burkevich v. Air Line Pilots Ass'n, 894 F.2d 346,352 (9th Cir. 1990) ………………………………33 Celotex Corp. v. Catrett, 477 U.S. 317; (1986) ………………………………………………………………29, 30 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ……13, 43 Concrete Works of Colo., Inc. v. City and Cty. of Denver, 36 F.3d 1513, (10th Cir. 1994) ………34 DePaula v. Easter Seals El Mirador, 859 F.3d 957, 970 (10th Cir. 2017) ……………………………16 Ebert v. Poston, 266 U.S. 548, 554 (1925) ………………………………………………………………………41 Evans v. Ray, 390 F.3d 1247 (10th Cir 2004). ……………………………………………………………………27 Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373 (1981)…………………………………………..5. Glover v. Standard Fed. Bank, 283 F.3d 953 (8th Cir. 2002) ……………………………………………43 Hawkins v. Mullin, 291 F.3d 658, 665 (10th Cir. 2002) …………………………………………………….27 Iselin v. United States, 270 U.S. 245, 251 (1926) ………………………………………………………………...41 jones v. Smart, [1785] 1 Term Rep. 44, 52 …………………………………………………………………………..40 Lytle v. Household Mfg., Inc., 494 U.S. 545 (1990) ……………………………………………………………34 Marks v. United States, 430 U.S. 188 (1977) ……………………………………………………………………27 McDonald v. Champion, 962 F.2d 1455, 1458-59 (10th Cir. 1992) …………………………………..28 McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973) ……………………………………………………....15 New Hampshire v. Maine, 532 U.S. 742, (2001) ……………………………………………………………..45, 49 Personnel Adm'r of Massachusetts v. Feeney, 442 U.S. 256 (1979) …………………………………..51
  • 4. iv Postal Service Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983) …………………………………..34 Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995) ……………………………………………..16 Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133 (2000) …………………………...5, 18, 36, 49 Reno v. Bossier Parish School Bd. 520 U.S. 471 (1997) ………………………………………………………51 Rogers v. Tennessee, 532 U.S. 451 (2001) ………………………………………………………………………….26 Skidmore v. Swift, 323 U.S. 134 (1944) ………………………………………………………………13, 44, 45 Society for the Propagation of the Gospel v. Wheeler, 22 F. Cas. 756,767……………………………26 Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248; 101 S. Ct. 1089 (1981) ………………………20 United States v. Sorensen, 801 F.3d 1217 (10th Cir 2015) ……………………………………………….14 Yousuf v. Cohlmia, 741 F.3d 31, 37 (10th Cir. 2014)……………………………………………………………..14 FEDERAL STATUTES The United States Constitution ...........................................................................................................25 42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968)....................................32 42 U.S.C.S. § 3604(b) (Fair Housing Act of 1968 – Terms & Conditions)……………………...35 42 U.S.C. § 1437f (United States Housing Act of 1937)…………………………………..……3, 4 Tax Reform Act of 1986 (26 U.S.C. §42 / IRC §42) ………………………………….…………..2,3 IRC §42 …..…............................................................................................3, 13, 19, 21, 22, 27, 29, 34 IRC §42 (g)…..…................................................................................................. 13, 16, 19, 22, 23, 46 IRC §42 (g)(4)…..…...................................................................................................................................3 IRC §42 (i)(3)(A)…................................................................................................................................5, 8 IRC §142 (d)(2)(B)...................................................................................................................................3 FEDERAL REGULATIONS 24 CFR Section 5.609 - Annual Income…………………3, 8, 13, 16, 19, 22, 23, 34, 46, 48 24 CFR Section 5.609 (a)(1)…………………………………………………………………………………4 24 CFR Section 5.609 (a)(4)…………………………………………………………………..……………4 24 CFR Section 5.609 (b)(2)……………………………………….………4, 22, 23, 25, 27, 48, 49 24 CFR § 100.65 ……………………………………………………………………………..……………….…5 Treasury Regulation Section 1.42-5(b)(1)(vii)……………………………………….……………..3 Fed. R. Civ. Pro. 56……………………………………………..…………………….…14, 18, 19, 30, 32
  • 5. v STATE OF COLORADO REGULATIONS Constitution of the State of Colorado, art II, §11 ………………………………..……………………………..24 OTHER AUTHORITIES Colorado Housing & Finance Authority Low-Income Housing Tax Credit Manual v. 7…..……………......................................21, 22, 23, 37, 48 HUD Occupancy Handbook 4350.3…………..….............................................................................16, 18, 36 U.S. House Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313)…………………1,2 U.S. GAO, Report to the Chairman, Joint Committee on Taxation, Rental Housing …………….1,2 U.S Internal Revenue Service; July 1988 Internal Revenue Bulletin; Notice 88-80 ……………4 Wright, A. Miller, & M. Kane, Federal Practice and Procedure…………………17, 18, 28, 39, 40 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice …………………………………………...17 The Digest of Justinian ………………………………………………………………………………………………...20 Black’s Law Dictionary ……………………………………………………………………………………………20, 41 Administrative Law and the Interpretation of Statutes ………………………………………………...21 Substantive Criminal Law ………………………………………………………………………………..…………25 Commentaries on American Law 432 (1826) ………………………………………………………………35 STATEMENT OF PRIOR & RELATED APPEALS Pursuant to 10th Cir. R. 28.2(C)(1), this appeal is related to Appellate Case No. 18-1148. RULE 26.1 CORPORATE DISCLOSURE STATEMENT Appellant Samuel K. Giles is a pro se litigant and has no parent corporation or publicly held corporation that owns 10% or more of any shares. GLOSSARY OF TERMS CHFA Colorado Housing and Finance Authority LURA Land Use Restriction Agreement HUD U.S. Department for Housing and Urban Development IRC Internal Revenue Code LIHTC Low-Income Housing Tax Credit Annual Income All amounts, monetary or not, that go to or are received on behalf of the family head.... Gross Undiminished by deduction
  • 6. [1] LEGISLATIVE HISTORY The Tax Reform Act of 1986 was enacted by unanimous vote (20-0) only after an all-encompassing comprehensive review in the 99th Congress. This charge was led by the Committee on Finance, and several subcommittees in public hearings and markup consideration. At that time, the Tax Reform Act was the most extensive review of internal revenue laws since the enactment of the 1954 Internal Revenue Code. This massive undertaking was designed to address the problem that current housing programs failed to adequately target low-income households. Specifically, the Tax Reform Act of 1986 designated the Low Income Housing Tax Credit (LIHTC) program to address this specific societal ill. More importantly, the committee’s primary concern was as follows: “The committee is concerned that the existing tax preferences for low- income rental housing have not been effective in providing affordable housing for low-income individuals. The committee believes a more efficient mechanism for encouraging the production of low-income rental housing … Certain of the existing Federal tax subsidies are not targeted to persons of truly low-income.”1 At that time, a study by the General Accounting Office2 of tax-exempt bond financed residential rental projects concluded that above-average income renters 1 U.S. House. Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313). Washington: Government Printing Office, 1986 2 United States General Accounting Office, Report to the Chairman, Joint Committee on Taxation, Rental Housing: Costs and Benefits of Financing with Tax-Exempt Bonds, GAO/RCED-86-2, February 1986.
  • 7. [2] can qualify as "low" or "moderate" income to gain access to affordable housing benefits. As well, another shortcoming of the tax subsidies at the time was that none limited the rents that may be charged to low-income households. The same GAO study found: “that while 96 percent of individuals with incomes over 80 percent of area median income (the present ceiling on "low" or "moderate" income) paid rents of less than 30 percent of their income, only 37 percent of individuals with incomes below 80 percent of area median paid rents of less than 30 percent of their income.” See U.S. General Accounting Office, Report to the Chairman, Joint Committee on Taxation, Rental Housing.3 The LIHTC program, however, addressed these societal concerns by binding rent to tenant income, and therefore ensuring that the subsidized housing is affordable to low-income households. Specifically, “the [LIHTC program] is better targeted to low-income individuals than provisions under present law, and requires that tenants' rents are limited to affordable amounts in relation to their incomes.”4 (emphasis added.) INTRODUCTION Prior to the Tax Reform Act of 1986, citizens with above average income levels were able to qualify for subsidized housing, thus, increasing undue 3 Id. 4 U.S. House. Committee on Finance. Tax Reform Act of 1986. (H. Rpt. 99-313). Washington: Government Printing Office, 1986.
  • 8. [3] competition for America’s limited affordable housing stock. However, in 1986, Congress successfully addressed this concern of increased unintended competition for subsidized housing in America with the Low-Income Housing Tax Credit (LIHTC) program, codified under title 26 - Internal Revenue Code of the United States Code, section 42 (26 U.S.C. §42). Since the enactment of the Tax Reform Act, the LIHTC program has capped rents based on tenant income, created more than 3 million housing units, and became widely lauded as the most successful affordable housing program in American history. During the Scheduling Conference held for proceedings in the instant matter, the district court stated: “The whole issue turns on whether he's financially qualified for one of your units.” See R., Vol II at 1301 ¶1. In this LIHTC program context, housing qualification is a function of the income determination method applied. Assuming Section 42 of the Internal Revenue Code (IRC) is statutorily permissible, then the income determination method declared under IRC §42(g) and further promulgated by Section 5.609 of the Code of Federal Regulations takes precedent. Specifically, the IRS has language in its IRC §142(d)(2)(B) and by reference from IRC §42(g)(4) that states, “income of individuals and area median gross income shall be determined by the Secretary in a manner consistent with determinations of lower income families and area median gross income under
  • 9. [4] section 8 of the United States Housing Act of 1937.” Treasury Regulation Section 1.42-5(b)(1)(vii) has similar language that states, “Tenant income is calculated in a manner consistent with the determination of annual income under section 8 of the United States Housing Act of 1937 (“Section 8”).”5 The determination of income under Section 8 of the U.S. Housing Act of 1937 is found in 24 CFR Section 5.609 - Annual Income. Specifically, §5.609 (a)(1) provides, “Annual income means all amounts, monetary or not, which [g]o to, or on behalf of, the family head.” Further, §5.609 (a)(4) states, “Annual income also means amounts derived (during the 12-month period) from assets to which any member of the family has access.” Moreover, §5.609 (b)(2) provides, “Expenditures for business expansion … shall not be used as deductions in determining net income.” In the instant matter, these statutory mandates were deliberately ignored and undermined. Both Mr. Giles’ 2016 and 2017 annual or gross incomes of $35,000 and $34,125, respectively, were ignored, and his business deductions were used as retaliatory mechanisms to reduce his annual income in order to fail the two and a half (2.5) times rent bar. The deliberate obfuscation of this 5 See U.S Internal Revenue Service; July 1988 Internal Revenue Bulletin; Notice 88-80; 1988-2 C.B. 396; 1988-30 I.R.B. 28
  • 10. [5] statutory framework eliminated Plaintiff-Appellant’s prima facie case and further, draws on Reeves6’ “affirmative evidence of guilt” guidance. STATEMENT OF JURISDICTION This is an appeal from the district court’s September 12, 2019 order and judgement granting Defendant-Appellee’s motion for summary judgment. Plaintiff filed a timely notice of appeal on October 11, 2019. This Court has jurisdiction pursuant to 28 U.S.C. §1291. Under 28 U.S.C. § 1291, the court of appeals has jurisdiction over “all final decisions of the district courts ... except where a direct review may be had in the Supreme Court.” Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 373 (1981). STATUTES & REGULATIONS The pertinent statutes and regulations are: • 42 U.S.C. §§ 3601-3619 – Fair Housing Act of 1968 • 26 U.S.C. § 42 – Low Income Housing Tax Credit • 42 U.S.C. § 1437f – U.S. Housing Act of 1937 • 24 CFR §5.609 – Tenant Annual Income • 24 CFR §5.609 (b)(2) – Self-Employed Business Net Income • 24 CFR § 100.65 - Discriminatory Housing Practices [Terms and Conditions] These statutes and regulations are reprinted in the addendum to this brief. 6 Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133 (2000) (“[W]e recognized that evidence that a defendant's explanation for an employment practice is unworthy of credence is one form of circumstantial evidence that is probative of intentional discrimination.”)
  • 11. [6] ISSUES PRESENTED FOR REVIEW 1. Whether retroactively applied judicial legislation can constitutionally preclude establishing a prima facie case. 2. Whether Section 42 of the Internal Revenue Code is statutorily permissible. 3. Whether gross sales reported on Line 1 of an IRS Schedule C (Form 1040) qualifies as “annual income” under Section 42 of the Internal Revenue Code further promulgated pursuant 24 CFR §5.609. This Court’s review of these issues is de novo. See “Standard of Review” Section below. STATEMENT OF THE CASE On February 26, 2018, Samuel K. Giles filed a Complaint against Alto Partners, LLLP (“Alto Partners”) in the U.S. District Court, Case Number 18-cv- 00467. On March 12, 2018, Plaintiff filed an Amended Complaint and a Renewed Motion for Temporary Restraining Order and Preliminary Injunction. (See R., Vol I at 123 – D.C. Dkt. No. 8)7 On March 15, 2018, the district court held an evidentiary hearing for the Renewed Motion for Temporary Restraining Order and Preliminary Injunction. At the hearing, the district court denied both the temporary restraining order and preliminary injunction presented in the Renewed Motion. (R., Vol I at 266). On April 13, 2018, Plaintiff timely filed a 7 Citation convention pursuant 10th Cir. R. 28.1.
  • 12. [7] notice of appeal for the denied preliminary injunction. (R., Vol I at 267; Case Number 18-1148). On April 20, 2018, Alto Partners filed a motion to dismiss. (R., Vol II at 3 - D.C. Dkt. No. 20) On August 22, 2019, the trial court held a scheduling conference. (See R., Vol II at 832 - D.C. Dkt. No. 33) On October 18, 2018, the motion to dismiss was denied. (R., Vol II at 3 - D.C. Dkt. No. 37) On January 31, 2019, the Tenth Circuit affirmed the trial court’s denial of the preliminary injunction. (See R., Vol II at 879) On March 20, 2019, the district court compelled production of Mr. Giles’ 2016 IRS tax transcripts, and 2017 tax return, profit and loss statement, and IRS tax transcripts. (See R., Vol II at 7 – D.C. ECF No. 64) On April 25, 2019, Alto Partners filed a motion for summary judgment. (See R., Vol II at 140 - D.C. Dkt. No. 67) On August 14, 2019, Plaintiff filed a request to take judicial notice. (D.C. Dkt. No. 78) No ruling was provided on the request to take judicial notice. On August 26, 2019, the trial was reset until February 24, 2020. On September 12, 2019, the trial court granted Alto Partners’ motion for summary judgment. (See R., Vol II at 102 - D.C. Dkt. No. 82) Plaintiff timely filed a notice of appeal for the granted motion for summary judgment. (See R., Vol II at 120 - D.C. Dkt. No. 86).
  • 13. [8] STATEMENT OF FACTS Mr. Giles is a long-term resident of Terrace Gardens Apartments, owned and operated by Adams County Housing Authority (ACHA). On May 25, 2010 Plaintiff-Appellant executed his lease with ACHA. On October 19, 2017, ACHA hosted a Terrace Gardens Town Hall for current residents to discuss its development plans of the campus and the likelihood of current tenants being displaced due to expansion activities. See R., Vol II at 599. Zachery Guerin, director of property operations, testified that Terrace Gardens are “older buildings.”8 Additionally, the City of Westminster issued ACHA Notice of Non-Compliance for Terrace Gardens. See R., Vol II at 572. Accordingly, ACHA extended an opportunity for tenants to relocate into its seventy (70) unit affordable housing development under construction on the Terrace Gardens campus entitled Alto Apartments. See R., Vol II at 600. Alto Partners, LLLP (Defendant-Appellee) owns the Alto Apartments development, Alto GP, LLC is the general partner of Alto Partners, LLLP and ACHA is the sole member of Alto GP, LLC. See R., Vol I at 195. Alto Apartments is a low-income housing tax credit (LIHTC) development regulated under Section 42 of the Internal Revenue Code (IRC). Each unit of Alto Apartments is a low-income unit as defined under IRC § 42(i)(3)(A). Tenant eligibility is a function of 8 See R., Vol II at 1270 ¶8
  • 14. [9] “income” pursuant IRC §42(g). The income determination method declared under IRC §42(g) is further promulgated by 24 CFR §5.609, defining “annual income” as “All amounts, monetary or not...” On October 23, 2017, Mr. Giles, submitted a housing application for Alto Apartments unit #215 with requested 2016 tax forms for income verification. See R., Vol II at 612. The maximum income limitation for Alto Apartments is $35,280 for an individual applicant. See R., Vol II at 657. To qualify for housing, an applicant may demonstrate, "verifiable minimum gross monthly income of at least 2.5 times the tenant's paid portion of the rent.” See R., Vol II at 615. In the instant case, this totals a minimum annual gross income of $34,020. In the alternative, an applicant may provide a “saving/checking account balance higher than the rest of the amount for half of the term of lease." In the instant case, this would total $6,804. Id. Line 1 of Mr. Giles’ 2016 IRS Schedule C (Form 1040)9 and page 3 of the 2016 IRS transcript report gross sales of $35,000.10 Both the 2016 IRS Schedule C (Form 1040) and 2016 IRS transcript designate gross sales under the “Income” section. Line 26 of Mr. Giles’ IRS Schedule C (Form 1040)11 and page 4 of the IRS transcript report wages of $27,500.12 Both the 2016 IRS Schedule C (Form 1040) 9 See R., Vol II at 624 10 See R., Vol II at 693 11 See R., Vol II at 624 12 See R., Vol II at 694
  • 15. [10] and 2016 IRS transcript designate wages under the “Expenses” section. Mr. Giles declared expenditures dedicated to business expansion totaling $7,500, and a 6- month average checking account balance from July 2017 to December 2017 of $8,844.52. See R., Vol II at 559 ¶14. On October 30, 2017, Mr. Giles inquired with Zachary Guerin, director of property operations with Alto Partners, regarding the status of the rental application. Mr. Guerin acknowledged Mr. Giles’ gross earned income as $35,000. See R., Vol II at 664. Despite being instructed that there would be a 24 to 72-hour turnaround to process the application, Alto Partners strategically delayed rejecting Mr. Giles’ application for over 100 days. Additionally, out of 70 available units, Mr. Giles was not offered one unit. See R., Vol II at 562 ¶29 Upon request of Alto Partners, on December 4, 2017, Mr. Giles submitted a business plan, 2016 profit loss statement and supplemental income verification documents. See R., Vol II at 262. On December 11, 2017, Defendant entered into a Land Use Restriction Agreement (LURA) with the Colorado Housing and Finance Authority (CHFA), in which Mr. Giles is a third-party beneficiary. See R., Vol II at 419. On December 19, 2017, ACHA acknowledge receipt of the 2016 tax returns, 2016 business plan and profit and loss statement, and other application materials. See R., Vol II at 524.
  • 16. [11] On January 10, 2018, Marcia Bross, compliance specialist with Alto Partners, demanded the execution of additional “missing” income verification documents and to produce a 2017 profit and loss statement within an arbitrary two-day deadline, January 12th at 4:00pm. See R., Vol II at 253. The CHFA LIHTC Compliance Manual mandates a singular financial statement. See R., Vol II at 469. Neither IRC §42, the LURA, nor the CHFA LIHTC Compliance Manual permit enhanced terms and conditions for occupancy such as a 48-hour submission window and two years of annual profit and loss statements.13 Further, Mr. Giles was told that failure to meet terms and conditions would result in loss of his housing opportunity. See R., Vol II at 253. The requested documents had never been asked for prior to Ms. Bross’s email on January 10th. On January 12th, Mr. Giles asserted his Fair Housing rights, and submitted all documents within his possession, custody or control - executed income verification documents without the 2017 profit and loss statement. See R., Vol II at 257. On January 17, 2018, in response to a voice mail ultimatum from Ms. Bross, submit a 2017 profit and loss statement by tomorrow or lose the housing unit.14 Mr. Giles submitted all documents within his possession, custody or control - the business plan with the 2016 profit and loss statement. See R., Vol II at 346. 13 See R., Vol II at 564 ¶38 14 See R., Vol II at 272
  • 17. [12] On January 29, 2018, Niki Rush, ACHA compliance manager, ignored reported gross sales15 and business expenses and confined the income determination method for Mr. Giles to business net income. See R., Vol II at 899. On February 7, 2018, Sylvia Anderson, property manager for Alto Apartments, formally denied the housing application. See R., Vol II at 784. The Colorado Housing and Finance Authority (CHFA) LIHTC Compliance Manual incorporates by reference Chapter 5 of the U.S. Department of Housing and Urban Development (HUD) Occupancy Handbook for income determination purposes.16 The HUD Occupancy Handbook mandates independent investigations prior to denial. See R., Vol II at 726. According to the Alto Apartments website, the housing unit remained available and Defendant-Appellee continued to solicit applications from persons with Mr. Giles’ qualifications. See R., Vol II at 781.17 Additionally, Ms. Anderson stated the rationale for the rejection was that Plaintiff-Appellant’s business net income did not meet the required 2.5 times gross monthly income criteria. See R., Vol II at 784. On February 8, 2018 at 10:24 AM, Mr. Giles opposed the housing denial and submitted that CHFA, HUD, and the IRS provides guidance to use annual or 15 See R., Vol II at 624 16 See R., Vol II at 856 17 See also Plaintiff-Appellant’s Motion for Judicial Notice, Ex. E
  • 18. [13] gross income versus net income for housing criteria analysis. See R., Vol II at 285. At 11:25 AM, Niki Rush declared Mr. Giles would “not qualify” even if his application was accordance with the law. See R., Vol II at 900. On February 9, 2018, Lauren Grimsley, portfolio operations manager for Alto Partners, shifted the rationale for the denial from the improper net income analysis for the 2.5 times gross monthly income criteria to an inability to verify Mr. Giles’ income due to income disclosures reported on his 2016 tax returns, specifically, IRS Schedule C (Form 1040) versus the IRS Form 1040. Ms. Grimsley provided that only income submitted on IRS Form 1040 could be used for income verification. See R., Vol II at 851 SUMMARY OF ARGUMENT The trial court has interpreted IRC §42 in a manner that excludes gross sales from the income determination method. See R., Vol II at 107-109. Further, the trial court precluded Mr. Giles from establishing a prima facie case by discounting evidence that ordinarily would be privy to Skidmore18 or Chevron19 deference to support its inferences in favor of the moving party. Remarkably, through judicial legislation, the trial court transformed the quintessential income-based aspect of this long-standing statute. Specifically, by 18 Skidmore v. Swift, 323 U.S. 134 (1944) 19 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
  • 19. [14] shifting the income determination method from the comprehensive “income” as declared under Section 42(g) and 24 CFR §5.60920 to the narrow scope of “wages,” the trial court single handedly reversed the efforts of Congress21 to direct the nation’s limited affordable housing stock toward low-income households based on its deliberately broad “income” definition – not wages. Accordingly, the trial court’s decision consisting of ex post facto rules is not only facially unconstitutional, but reopens the specific loophole that Congress intended to seal - permitting above average income renters to qualify for subsidized housing intended for low-income households. Explicitly, ignoring gross sales as “income” and exclusively evaluating “wages,” permits above average income renters with high gross sales to qualify for subsidized housing with self-allocated low-income wages. STANDARD OF REVIEW This Court reviews questions of statutory interpretation de novo. United States v. Sorensen, 801 F.3d 1217 (10th Cir 2015). Further, this Court reviews a grant of summary judgment de novo, drawing all reasonable inferences and resolving all factual disputes in favor of the non-moving party." Yousuf v. Cohlmia, 741 F.3d 31, 37 (10th Cir. 2014). A court shall grant summary judgment if "the 20 See R., Vol II at 790 21 See Legislative History, supra.
  • 20. [15] movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "As to materiality, the substantive law will identify which facts are material. Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). "[S]ummary judgment will not lie if the dispute about a material fact is 'genuine,' that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. At "the summary judgment stage the judge's function is not [] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Id. at 249. This Court evaluates Fair Housing Act discrimination claims under the three-part McDonnell Douglas analysis. Asbury v. Brougham, 866 F.2d 1276, 1279 (10th Cir. 1989)(citing McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). Under the McDonnell standard the plaintiff must first offer proof of a prima facie case of discrimination. Id. The burden then shifts to the defendant to show that the refusal to rent or negotiate was motivated by legitimate, non-racial considerations. Id. Then the burden shifts back to the plaintiff to show that these reasons were pretextual. Id. At this third step, to avoid summary judgment, the plaintiff need only show that “there is a genuine dispute of material fact” as to
  • 21. [16] whether the “proffered reason for the challenged action is pretextual.” Randle v. City of Aurora, 69 F.3d 441, 451 (10th Cir. 1995) (applying McDonnell to employment discrimination.) To show pretext a plaintiff has several options open to him. First, he may demonstrate that the proffered reason for the action is factually false. DePaula v. Easter Seals El Mirador, 859 F.3d 957, 970 (10th Cir. 2017). Second, he may demonstrate that “discrimination was a primary factor” in the defendant’s decision. Id. This can often be achieved “by revealing weaknesses, implausibilities, inconsistencies, incoherences, or contradictions” in the defendants’ proffered reason “such that a reasonable fact finder could deem the employer's reason unworthy of credence.” Id. Finally the plaintiff may also show pretext by demonstrating that the defendant “acted contrary to written company policy, an unwritten company policy, or a company practice.” Id. ARGUMENT The trial court committed several reversible errors when granting Alto Partners’ motion for summary judgment: 1) employing and retroactively applying ex post facto conditions, 2) cherry picking evidence from compelled documents, 3) overlooking that Alto Partners failed to discharge its burden of production, 4) weighing genuine issues of material fact in dispute, 5) drawing inferences exclusively in favor of Alto Partners, 6) concluding acts obviously
  • 22. [17] contrary to policy as attempts to adhere to policy, 7) ignoring glaring contradictions in the record, and 8) making a factually false conclusion that a housing denial can be based on an income determination method exclusively examining tenant “wages”. Moreover, the trial court’s act of judicial legislation combined with persistent disregard for both the $35,000 and $34,125 in income reported on Line 1 of the 201622 and 201723 IRS Schedule C (Form 1040), respectively, suggests that the non-qualification argument is a ruse. Simple logic denotes that Mr. Giles satisfied the $34,020 qualification, thus establishing his prima facie case. However, the level of mendacity required to cover up this straightforward conclusion will cause any reasonable fact finder to disbelieve Alto Partners’ proffered non-discriminatory rationales. Moreover, this is a classic example of implied repeal. The trial court repealed by implication the income determination method declared under IRC §42(g), 24 CFR §5.609, and mirrored in section 3.6 of the CHFA LIHTC Manual.24 This action creates more ambiguities that the plain language of the statute 22 This income is also reflected on the compelled 2016 IRS transcript. See R., Vol II at 639 23 This income is also reflected on the compelled 2017 IRS transcript. See Plaintiff-Appellant’s Motion for Judicial Notice, Ex. A. 24 See R, Vol II at 856
  • 23. [18] permits.25 Consequently, rejection of Alto Partners’ proffered reasons will permit the trier of fact to infer pretext of the ultimate fact of intentional discrimination under the Reeves26 framework. I. ALTO PARTNERS FAILED TO SATISFY ITS BURDEN OF PRODUCTION In the context of summary judgment, the burden of establishing the nonexistence of a "genuine issue" is on the party moving for summary judgment. 10A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure § 2727, p. 121 (2d ed. 1983) (hereinafter Wright) (citing cases); 6 J. Moore, W. Taggart & J. Wicker, Moore's Federal Practice para. 56.15[3] (2d ed. 1985). This burden has two distinct components: an initial burden of production, which shifts to the nonmoving party if satisfied by the moving party; and an ultimate burden of persuasion, which always remains on the moving party. See 10A Wright § 2727. The court need not decide whether the moving party has satisfied its ultimate burden of persuasion27 unless and until the court finds that 25 West Virginia Univ. Hosps. v. Casey, 499 U.S. 83, 100-01 (1991) (per Scalia, J.) (internal citation omitted) (“it is our role to make sense rather than nonsense out of the corpus juris”) 26 Reeves v. Sanderson Plumbing Pro., Inc., 530 U.S. 133, (2000) (In appropriate circumstances, the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party's dishonesty about a material fact as 'affirmative evidence of guilt.') (emphasis added.) 27 Summary judgment should not be granted unless it is clear that a trial is unnecessary, Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) at 255, and any doubt as to the existence of a genuine issue for trial should be resolved against the moving party, Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-159 (1970).
  • 24. [19] the moving party has discharged its initial burden of production. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157-161 (1970); 1963 Advisory Committee's Notes on Fed. Rule Civ. Proc. 56(e), 28 U. S. C. App., p. 626. A. Alto Partners Failed to Establish a Prima Facie Showing The burden of production imposed by Rule 56 requires the moving party to make a prima facie showing that it is entitled to summary judgment. 10A Wright § 2727. The way this showing can be made depends upon which party will bear the burden of persuasion on the challenged claim at trial. If the moving party will bear the burden of persuasion at trial, that party must support its motion with credible evidence -- using any of the materials specified in Rule 56(c) -- that would entitle it to a directed verdict if not controverted at trial. Ibid. Such an affirmative showing shifts the burden of production to the party opposing the motion and requires that party either to produce evidentiary materials that demonstrate the existence of a "genuine issue" for trial or to submit an affidavit requesting additional time for discovery. Ibid.; Fed. Rules Civ. Proc. 56(d), (e).28 28 Mr. Giles requested to reopen discovery to analyze the terms and conditions of occupancy for similarly situated applicants. See R., Vol II at 543 ¶14. See also Plaintiff-Appellant’s Motion for Judicial Notice, Ex E.
  • 25. [20] B. Alto Partners Explanation is Legally Insufficient The burden that shifts to the defendant-appellee, therefore, is to rebut the presumption of discrimination by producing evidence that the plaintiff-appellant was rejected, or someone else was preferred, for a legitimate, nondiscriminatory reason. The defendant-appellee need not persuade the court that it was actually motivated by the proffered reasons. See Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248; 101 S. Ct. 1089 (1981) (“It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff.”) However, the explanation provided “must be legally sufficient to justify a judgment” for the defendant. Id. If the defendant carries this burden of production, the presumption raised by the prima facie case is rebutted, and the factual inquiry proceeds to a new level of specificity. Id. i. Alto Partners’ “Wages” Based Income Determination Method is Inconsistent with IRC §42 Assuming Section 42 of the Internal Revenue Code29 (IRC) is statutorily permissible, then the income determination method declared under IRC §42(g) and further promulgated by 24 CFR §5.609 takes precedent.30 The income 29 26 USCS § 42 30 See R., Vol II at 790
  • 26. [21] determination method of “annual income” is defined as: “All amounts, monetary or not.”31 The words of a governing text are supposed to be of paramount concern, and what they convey, in their context, is what the text means.32 According to this broad “annual income” definition, it would be difficult for any rational person to conclude that the gross sales of $35,000 reported on Line 1 of Mr. Giles’ IRS Schedule C (Form 1040) does not qualify as “annual income” under IRC §42 and 24 CFR §5.609. As Justinian's Digest put it: A verbis legis non est recedendum33 ("Do not depart from the words of the law"). Even if this Court interprets “income” exclusively from the Colorado Housing and Finance Authority (CHFA) Low Income Housing Tax Credit (LIHTC) Compliance Manual, Section 3.6 of the CHFA LIHTC Manual defines annual income as: “Annual income is the gross income a family anticipates it will receive in the 12-month period following the effective date of the certification of income.” (emphasis added.) Black’s Law Dictionary defines “gross” as: “Undiminished by deduction; entire <gross profits>.”34 Further, “income” is 31 24 CFR §5.609 32 "We have not traveled, in our search for the meaning of the lawmakers, beyond the borders of the statute.” United States v. Great Northern Ry., 287 U.S. 144, 154 (1932) (per Cardozo, J.) 33 Cf. Digest 32.69 pr. (Marcellus). Cf also Uniform Statute & Rule Construction Act §19 (1995) (“Primacy of Text. The text of a statute or rule is the primary, essential source of its meaning."). 34 GROSS, Black's Law Dictionary (11th ed. 2019)
  • 27. [22] defined as: “The money or other form of payment that one receives, usu. periodically, from employment, business, investments, royalties, gifts, and the like. See earnings. Cf. profit.”35 More importantly, the use of an alternative income determination method other than “annual income” is unsupported by IRC §42 and its legislative history. Specifically, the statute expressly denotes “income” not “wages.” The expression of one thing implies the exclusion of others. (expressio unius est exclusio alterius). If Congress in legislating speaks only of specific things and specific situations, it is a legitimate inference that the particulars exhaust the legislative will. The particular which is omitted from the particulars mentioned is the casus omissus, which the judge cannot supply because that would amount to legislation.36 Accordingly, the trial court’s reliance on a novel “wages” income determination method in lieu of “annual income” lacks legal footing under IRC §42. See R., Vol II at 107. Thus, to use wages of $27,500 in lieu the annual income (gross sales) of $35,000 or $34,125 is legally insufficient to support a motion for summary judgment. 35 INCOME, Black's Law Dictionary (11th ed. 2019) 36 J.A. Corry, Administrative Law and the Interpretation of Statutes, 1 U Toronto L J. 286, 298 (1936).
  • 28. [23] ii. IRS Schedule C (Form 1040) is a Verifiable Document The district court acknowledged the CHFA LIHTC Manual as the prevailing document for interpreting provisions of the housing transaction. See R., Vol II at 110. On October 23, 2017, Mr. Giles submitted 2016 tax returns consisting of IRS Form 1040 and IRS Schedule C (Form 1040) with the housing application and fee.37 Line 1 of the IRS Schedule C (Form 1040) reported gross sales of $35, 000 and Line 26 wages of $27,500.38 The trial court concluded that the IRS Schedule C (Form 1040) is a non- verifiable document. See R., Vol II at 112 - ECF No. 82, p. 11. Contrarily, Section 3.18 of the CHFA LIHTC Manual provides: “All attempts to obtain verification must be documented. Acceptable forms of verification for specific types of income include are as follows.”39 Section 3.18(B) explicitly lists IRS Schedule C (Form 1040) as an acceptable form of verification: “The tax return must include IRS Form 1040 and Schedule C.”40 (emphasis added). The term “and” signals that the IRS Form 1040 or Schedule C alone does not meet the standard of acceptable forms of verification. General terms are to be given their general meaning. (generalia verba sunt generaliter intelligenda). 37 See R., Vol II at 559 ¶10 38 See R., Vol II at 624 39 See R., Vol II at 467 40 See R., Vol II at 1194
  • 29. [24] Notably, the trial court elected to ignore precise language in the CHFA LIHTC Manual outlining the verifiability of IRS Schedule C (Form 1040). Tenants must supply both documents and each are verifiable. Accordingly, it is legally insufficient to ignore a required verifiable document, hence, Alto Partners failed to meet its burden of production under Rule 56. iii. The Trial Court’s Ex Post Facto Rule is Unconstitutional If IRC §42 is statutorily permissible, then the income determination method declared under IRC §42(g) and further promulgated by 24 CFR §5.609 is binding. Moreover, Section 5.609(b)(2) provides narrow and precise instruction: “Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.”41 (emphasis added) This notion is mirrored in the CHFA LIHTC Manual, specifically, Section 3.9 states, “You may not deduct: interest on loans or other expenses for business expansion.” See R., Vol II at 858. Under the plain language of this statute, the $7,500 in business expenses used to expand Mr. Giles’ business must be added to the $27,500 in wages he paid himself. See R., Vol II at 559 ¶14. In contrast, the trial court interpreted Section 5.609(b)(2) as: “But Mr. Giles did not provide ACHA with documentation 41 See R., Vol II at 1256
  • 30. [25] that $7,500 of his business gross earnings were used for business expansion at the time he applied.”42 (emphasis added.) Although there is historical precedent in Anglo-American law to contemplate how the lawgiver would have wanted judges to resolve a legal question, however, today it is anomalous and philosophically indefensible as violating the separation of powers, and it produces considerable judicial mischief. "The question ... is not what Congress 'would have wanted' but what Congress enacted." Argentina v. Weltover, Inc., 504 U.S. 607,618 (1992) (per Scalia, J.). Further, a statute presumptively has no retroactive application. "The presumption is very strong that a statute was not meant to act retrospectively, and it ought never to receive such a construction if it is susceptible of any other." - United States Fid. & Guar. Co. v. United States ex ref. Struthers Wells Co., 209 U.S. 306, 314 (1908) (per Peckham, J.). Additionally, in the words of Justice Joseph Story (describing the New Hampshire Constitution's prohibition of "retrospective" laws), "take away or impair vested rights acquired under existing laws or create a new obligation, impose a new duty, or attach a new 'disability, in 42 See R., Vol II at 113 or ECF No. 82, p.12
  • 31. [26] respect to transactions or considerations already past."43 (emphasis added.) Since the presumption is a canon of interpretation and not a rule of constitutional law, a statute can explicitly or by clear implication be made retroactive. Its retroactive operation may, but will not necessarily, violate one of the Ex Post Facto Clauses,44 one of the Due Process Clauses,45 the Takings Clause,46 or the Obligation of Contracts Clause47 of the United States Constitution, or similar provisions in the State of Colorado Constitution.48 In the instant matter, retroactively requiring Mr. Giles to submit a list of business expenses at the time of application in order for the §5.609(b)(2) statute to be applicable is unforeseeable and, facially, an ex post facto rule. Although ex post facto principles are thus relevant to the retroactive application of judicial decisions through the due process clause of either the Fifth or the Fourteenth Amendment, the Ex Post Facto Clause is not incorporated wholesale or "jot-for- jot." Rogers v. Tennessee, 532 U.S. 451 (2001) ("The Ex Post Facto Clause, by its 43 Society for the Propagation of the Gospel v. Wheeler, 22 F. Cas. 756,767 (C.C.D.N.H. 1814) (No. 13,156) (we have modified the tense of Story's verbs). 44 U.S. Const. art. I, § 9, cl. 3; § 10, cl. 1. See, e.g., Stogner v. California, 539 U.S. 607 (2003) (per Breyer, J.) 45 U.S. Const. amend. V; amend. XIV, § 1. See, e.g., Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 15 (1976) (per Marshall,].). But see United States v. Carlton, 512 U.S. 26, 39 (1994) (Scalia, J., concurring in the judgment). 46 U.S. Const. amend. V. See, e.g., Eastern Enters. v. Apfel, 524 U.S. 498 (1998) (per O'Connor,].). 47 U.S. Const. art. I,§ 10, cl. 1.; See Land Use Restriction Agreement, R., Vol II at 666; See also, e.g., United States Trust Co. of N.Y. v. New jersey, 431 U.S. 1, 32 (1977) (per Blackmun, J.). 48 Constitution of the State of Colorado, art. II, §11
  • 32. [27] own terms, does not apply to courts.") Therefore, the prohibition of the ex post facto application of judicial decisions is less extensive than the prohibition of ex post facto statutes.49 The Rogers Court distilled the ex post facto test for judicial opinions into the following: "Due process limitations on the retroactive application of judicial interpretations of criminal statutes" only apply to those decisions "that are 'unexpected and indefensible by reference to the law which had been expressed prior to the conduct in issue.'" 532 U.S. at 461. The Supreme Court held that judicial expansion beyond the plain language violated due process principles of fair warning when retroactively applied. Id. at 352-55, 363; see also Marks v. United States, 430 U.S. 188 (1977) at 196 (holding that although statutory language was not narrow or precise, judicial creation of new standards governing obscenity was unexpected and violated the fair warning principle of due process when applied retroactively). The Tenth Circuit has provided guidance to the text of the note in applying the ex post facto principles of Marks, Bouie, and Rogers by formulating a two- pronged inquiry. Evans v. Ray, 390 F.3d 1247 (10th Cir 2004). First, the Court discerns whether the statute is "narrow and precise" on its face. Hawkins v. 49 See Wayne R. LaFave, Substantive Criminal Law § 2.4(c) (2d ed. 2003).
  • 33. [28] Mullin, 291 F.3d 658, 665 (10th Cir. 2002), cert. denied, 537 U.S. 1173, 154 L. Ed. 2d 916, 123 S. Ct. 1012 (2003) (citing [**11] McDonald v. Champion, 962 F.2d 1455, 1458-59 (10th Cir. 1992) (quotation omitted)). If so, "any judicial expansion of that statute beyond its own terms will be considered unforeseeable." (quotation omitted). Second, if the statute is not so clearly drawn on its face, we ask "'whether the [state court's] construction is so unexpected and indefensible by reference to the law which had been expressed prior to the conduct at issue as to prevent its application retroactively.'" Id. at 666 (quoting McDonald, 962 F.2d at 1458) (alteration in original). 24 CFR §5.609(b)(2) provides narrow and precise instruction.50 Also, none of the trial court’s novel conditions appear in IRC §42, 24 CFR §5.609, or in the CHFA LIHTC Manual. Additionally, this rule does not appear in the record and is being retroactively applied approximately two years after the initial housing application submission. Accordingly, the district court’s judicial expansion of the statute is unexpected and indefensible. Even if the district court’s novel conditions were permissible, the IRS Schedule C (Form 1040) includes a listing of business expenses that would satisfy this condition. See R., Vol II at 624.51 Absent this facially unconstitutional ex post facto rule, Mr. Giles 50 See R., Vol II at 1256 51 IRS Schedule C (Form 1040) - Part II entitled “Expenses”
  • 34. [29] qualified for the housing unit under IRC §42, thus, Alto Partner failed to provide a legally sufficient rationale to discharge its initial burden of production. C. Alto Partners Failed to Affirmatively Demonstrate Lack of Evidence If the burden of persuasion at trial would be on the nonmoving party, the party moving for summary judgment may satisfy Rule 56's burden of production in either of two ways. Celotex Corp. v. Catrett, 477 U.S. 317; (1986) (Brennan, J, dissenting). First, the moving party may submit affirmative evidence that negates an essential element of the nonmoving party's claim. Second, the moving party may demonstrate to the court that the nonmoving party's evidence is insufficient to establish an essential element of the nonmoving party's claim. See 10A Wright § 2727, pp. 130-131. Plainly, a “conclusory assertion” that the nonmoving party has no evidence is insufficient. Celotex, 477 U.S. 317. The moving party must “affirmatively demonstrate” that there is no evidence in the record to support a judgment for the nonmoving party. Id. Besides negatively weighing evidence, the trial court did not demonstrate how Mr. Giles’ evidence was insufficient. Mr. Giles was deposed by Alto
  • 35. [30] Partners,52 deposed Marcia Bross,53 and provided the court with an affidavit verifying material facts, such as an annual income of $35,000. See R., Vol II at 1024. Neither Alto Partners nor the trial court negated or showcased that the evidence is insufficient. Instead, the trial court ignored and improperly discounted these essential evidential elements that formed the basis of its conclusory assertions. Furthermore, if the moving party has not fully discharged this initial burden of production, its motion for summary judgment must be denied, and the court need not consider whether the moving party has met its ultimate burden of persuasion. Celotex, 477 U.S. 317 (Brennan, J, dissenting). Accordingly, the nonmoving party may defeat a motion for summary judgment that asserts that the nonmoving party has no evidence by calling the court's attention to supporting evidence already in the record that was overlooked or ignored by the moving party. Id. The district court selectively acknowledged elements from depositions, affidavits, material facts, and compelled documents that sustained its assertions. However, the same records used to deny Mr. Giles’ prima facie case contain evidence of housing qualification under IRC §42. Most notably, the district court 52 See R., Vol II at 160 53 See R., Vol II at 1398
  • 36. [31] acknowledged the $27,500 and $29,500 in wages reported on Line 26 of the 2016 and 2017 IRS Schedule C (Form 1040), respectively. Yet, the gross sales of $35,000 and $34,125 reported on Line 1 of the 2016 and 2017 IRS Schedule C (Form 1040) were ignored. Accordingly, absent such demonstration of insufficiency of evidence, the summary judgment should have been denied on the grounds that Alto Partners had failed to meet its burden of production under Rule 56. II. THERE IS SUFFICIENT EVIDENCE IN THE RECORD TO CREATE A GENUINE ISSUE OF MATERIAL FACT Assuming Section 42 of the Internal Revenue Code is statutorily permissible, then the income determination method declared under IRC §42(g) and further promulgated by 24 CFR §5.609 is governing law. Accordingly, it is a genuine issue of material fact whether Line 1 ($35,000) designated as “Income” or Line 26 ($27,500) designated as “Expenses” reported on the 2016 IRS Schedule C (1040) is permissible. See Brown v. Parker-Hannifin Corp., 746 F.2d 1407, 1411 (10th Cir. 1984) ("Where different ultimate inferences may be drawn from the evidence presented by the parties, the case is not one for summary judgment."). Cornerstone to Alto Partners’ defense is that Mr. Giles’ 2016 financial records submitted on October 23, 2017 and December 4, 2017 were insufficient
  • 37. [32] and unverifiable. Therefore, the trial court concluded Alto Partners was required to demand 2017 financial records, not to unlawfully increase terms and conditions, but to satisfy policy. The trial court discounted the deposition of Mr. Giles where Alto Partners explicitly stated there was a genuine issue over this fact: 9 Q - She is giving you a second opportunity to 10 provide the relevant information, correct? 11 A - The information was already supplied. 12 Q - Again, that's under your position? 13 A That's a fact. That's in Exhibit 5. 14 Q - Okay. Again, the parties disagree on that, but 15 you're -- 16 A - So you disagree that this information is not in 17 Exhibit 5? See R., Vol II at 192. Other genuine issues of material fact are apparent from the depositions conducted and submitted affidavits during the proceedings, in particular; 1) whether the gross sales reported on Line 1 of the IRS Schedule C (Form 1040)54 and page 3 of the IRS Transcripts55 qualifies as “annual income,” and 2) whether expenses for business expansion are to be deducted.56 Each of these compelling and undisputed material facts determine whether Mr. Giles 54 See R., Vol II at 624; for tax year 2017, see also R., Vol II at 695 55 See R., Vol II at 691; for tax year 2017, see also Plaintiff-Appellant’s Motion for Judicial Notice, Ex. A. 56 24 CFR 5.609(b)(2)
  • 38. [33] established his prima facie case by qualifying for housing. Thus, these factors are essential and not a mere scintilla of evidence in hopes to create a factual dispute. Specifically, these facts are material because the legal sufficiency of the alleged facts could only be decided in Alto Partners favor on the assumption that they are not true.57 Moreover, Mr. Giles asserts that the district court should have considered his affidavit in its ruling on summary judgment, pursuant Federal Rule of Civil Procedure 37(c)(1). Accordingly, there are genuine issues of material fact that preclude the entry of summary judgment against Mr. Giles’ claim of intentional discrimination under the Fair Housing Act, 42 U.S.C. §§ 3601- 3619. A. The District Court Made all Inferences in Favor of the Moving Party In holding that the record contained insufficient evidence to sustain a jury's verdict, the district court misapplied the standard of review dictated by Rule 56. Principally, the court disregarded critical evidence favorable to Mr. Giles -- namely, the evidence supporting Mr. Giles’ prima facie case and, subsequently, undermining Defendant-Appellee’s nondiscriminatory 57 See, e.g., Burkevich v. Air Line Pilots Ass'n, 894 F.2d 346,352 (9th Cir. 1990)
  • 39. [34] explanation. See R., Vol II at 102. Finally, the district court failed to draw all reasonable inferences in his favor.58 While entertaining a motion for judgment as a matter of law, the court should review all evidence in the record. In doing so, however, the court may not make credibility determinations or weigh the evidence. Lytle v. Household Mfg., Inc., 494 U.S. 545 (1990). Recognizing that "the question facing triers of fact in discrimination cases is both sensitive and difficult," and that "there will seldom be 'eyewitness' testimony as to the employer's mental processes," Postal Service Bd. of Governors v. Aikens, 460 U.S. 711, 716 (1983). i. The District Court Discounted Evidence Supporting a Prima Facie Case The trial court discounted the evidence supporting Mr. Giles’ prima facie case and challenging Alto Partners’ explanation for its decision to deny housing. See R., Vol II at 624. The court confined its review of evidence favoring Plaintiff- Appellant to that evidence showing that Mr. Giles submitted all requested verification documentation: certification forms, a business plan, a 2016 tax return consisting of IRS Form 1040 and IRS Schedule C (Form 1040), and a 2016 profit and loss statement for his business. See R., Vol II at 108. It is therefore 58 Concrete Works of Colo., Inc. v. City and Cty. of Denver, 36 F.3d 1513, 1517 (10th Cir. 1994) (“The Court will examine the factual record and make reasonable inferences therefrom in the light most favorable to the party opposing summary judgment.)
  • 40. [35] apparent that the court believed that only this evidence of the discriminatory transaction would be relevant to a jury. Line 26 of the 2016 IRS Schedule C (Form 1040)59 and page 4 of the 2016 IRS transcripts60 report wages of $27,500. This is undisputed. Line 1 of the 2016 IRS Schedule C (Form 1040)61 and page 3 of the 2016 IRS transcripts62 report gross sales as “income” of $35,000. This has been wholly ignored. The minimum income to qualify for housing was set at $34,020. See R., Vol II at 103. Determining income based exclusively on wages disqualifies Mr. Giles for housing, while interpreting gross sales of $35,000 as annual income qualifies Mr. Giles for housing. Id. Assuming IRC §42 is statutorily permissible, under 24 CFR §5.609, “annual income” is defined as: “All amounts, monetary or not.”63 Further, the CHFA LIHTC Manual describes annual income as “gross income.”64 See R., Vol II at 1322 ¶2. Bypassing both annual income and gross income definitions, the trial court made an inference in favor of Alto Partners by ignoring the gross sales of $35,000 to utilize a novel income determination method based on wages. "The evidence 59 See R., Vol II at 624 60 See R., Vol II at 694 61 See R., Vol II at 624 62 See R., Vol II at 693 63 See R., Vol II at 1256 64 GROSS - Undiminished by deduction; entire <gross profits>; Black's Law Dictionary (11th ed. 2019)
  • 41. [36] of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) ii. Wages Based Income Determination Method Cloaks Suspicion of Mendacity This critical inference to use a “wages” income determination method served two purposes: 1) preclude Mr. Giles’ prima facie case, and 2) cloak any suspicion of mendacity or disbelief of the reasons put forth by Alto Partners. Assuming IRC §42 is statutorily permissible, then the income-based determination method declared under IRC §42(g) and further promulgated by 24 CFR § 5.609 is binding. A textually permissible interpretation that furthers rather than obstructs the purpose of IRC §42 should be favored.65 Accordingly, Alto Partners’ “wages” based explanation for the housing denial is void of credence. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133 (2000) (“the trier of fact can reasonably infer from the falsity of the explanation that the employer is dissembling to cover up a discriminatory purpose. Such an inference is consistent with the general principle of evidence law that the factfinder is entitled to consider a party's dishonesty about a material fact as "affirmative evidence of guilt.") 65 Citium Bank of Bryan v. First State Bank, 580 S.W.2d 344, 348 (Tex. 1979). (if the "language is susceptible of two constructions, one of which will carry out and the other defeat [its] manifest object, [the statute] should receive the former construction.”)
  • 42. [37] These inferences in favor of Alto Partners continued. For instance, while acknowledging that Mr. Giles “was paying himself a salary of $27,500 from his business’s gross income,” the trial court disregarded the amount of his “business’ gross income.”66 Furthermore, the court acknowledged that the "$27,500 amount"67 of gross wages reported on the IRS Schedule C (Form 1040), however, the court discounted both the gross sales and wages reported on the IRS Schedule C (Form 1040) stating that they could not be verified them on the ground that they "did not appear on Mr. Giles’ personal tax forms, ACHA could not verify this amount as Mr. Giles’ reported $27,500 in income." See R., Vol II at 112 ¶1. Furthermore, the court inferred a distinction, in the context of income verification, between IRS Form 1040 and IRS Schedule C (Form1040). If words are to be understood in their ordinary everyday meanings, unless the context indicates that they bear a technical sense,68 then this inference is contrary to the plain language of CHFA LIHTC Manual.69 Both IRS Form 1040 and IRS Schedule C (Form 1040) are not only verifiable but required documents. 66 See R., Vol II at 112 ¶1 67 Id. 68 James Kent, Commentaries on American Law 432 (1826) ("The words of a statute are to be taken in their natural and ordinary signification and import; and if technical words are used, they are to be taken in a technical sense.") 69 See R, Vol II at 467 (“All attempts to obtain verification must be documented. Acceptable forms of verification for specific types of income include are as follows.”)
  • 43. [38] Specifically, CHFA, IRS70 and HUD all mandate the verifiability of IRS Schedule C (Form 1040). Explicitly, Section 3.18 of the CHFA LIHTC Manual71 provides: “All attempts to obtain verification must be documented. Acceptable forms of verification for specific types of income include are as follows.” Section 3.18(B)72 explicitly lists IRS Schedule C (Form 1040) as an acceptable form of verification: “The tax return must include IRS Form 1040 and Schedule C.” Strangely, the trial court acknowledges the necessity of both documents. See R., Vol II at 113 ¶2. An income determination inquiry pursuant to IRC §42 should have stopped by interpreting Mr. Giles’ gross sales of $35,00073 as qualifying as annual income under 24 CFR § 5.609. Nevertheless, pursuing income determination inquiry based on deductions from gross sales (Line 1 of the Schedule C), arrives at the same total household income result, $35,000. Once the $27,500 of wages (Line 26)74 is deducted from gross sales of $35,000, the record provides that Mr. Giles invested the remaining $7,500 in to expenses related to expanding his business.75 24 CFR §5.609(b)(2) provides 70 See R., Vol II at 1263 & 1264 71 See R., Vol II at 467 72 See R., Vol II at 1194 73 See R., Vol II at 624 74 Id. 75 See R., Vol II at 559 ¶14.
  • 44. [39] narrow and precise instruction: “Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.” (emphasis added.) See R., Vol II at 790. The trial court acknowledged that the statute is mirrored in the CHFA LIHTC Compliance Manual Section 3.9: “You may not deduct: interest on loans or other expenses for business expansion.” See R., Vol II at 112 ¶3. Accordingly, the $7,500 for business expansion must be added to the gross wages of $27,500, totaling $35,000. Therefore, adhering to this narrow and precise language 1) establishes Mr. Giles’ prima facie case, and 2) demonstrates the fundamental falsity of Alto Partners’ nondiscriminatory explanation. FY 2016 FY 2017 Gross Sales (Income) $35,000.00 $34,125.00 Net Income from business activities (997) (5,841) 76If negative use $0.00 $0.00 $0.00 + + Gross Wages $27,500.00 $29,500.00 + + Expenses for business expansion $7,500.00 $4,625.00 = = Annual Income $35,000.00 $34,125.00 Maximum Annual Income Threshold $35,280.00 $35,280.00 Minimum Annual Income Threshold $34,020.00 $34,020.00 Income Qualified? Yes Yes 76 HUD Occupancy Handbook, 4350.3, Ch 5 §5-6(H)(3)
  • 45. [40] However, in 2016 and 2017, the trial court discounted the evidence that the $7,500 for business expansion expenses must be added to the $27,500 in wages, and $4,625 for business expansion expenses must be added to the $29,500 in wages, respectively. “But Mr. Giles did not provide ACHA with documentation that $7,500 of his business gross earnings were used for business expansion at the time he applied.” (emphasis added.) See R., Vol II at 113. This novel provision injected by the trial court is not discussed or implied by statute or policy. Nothing is to be added to what the text states or reasonably implies (casus omissus pro omisso habendus est). The absent provision cannot be supplied by the courts.77 Further, the trial court made a key inference in favor of Alto Partners, “ACHA likely did not account for business expansion in their calculations because they didn’t have any reason to do so.” See R., Vol II at 113. Even if Congress would have wanted the novel provision, it did not provide, and that is an end of the matter. As Justice Louis Brandeis put the point: 77 See jones v. Smart, [1785] 1 Term Rep. 44, 52 (per Buller,].) ("[W]e are bound to take the act of parliament, as they have made it: a casus omissus can in no case be supplied by a Court of Law, for that would be to make laws.") (emphasis added); MacMillan v. Director, Div. of Taxation, 434 A.2d 620, 621 (N.J. Super. Ct. App. Div. 1981) ( We certainly may not supply a provision no matter how confident we are of what the Legislature would do if it were to reconsider today."). See also Frank Easterbrook, Statutes' Domains, 50 U. Chi. L. Rev. 533, 548 (1983) (Judicial Interpretation of legislative gaps would be questionable even if judges could ascertain with certainty how the legislature would have acted. Every legislative body’s power is limited by a number of checks .... The foremost of these checks is time … The unaddressed problem is handled by a new legislature with new instructions from the voters.").
  • 46. [41] "A casus omissus does not justify judicial legislation."78 And Brandeis again: "To supply omissions transcends the judicial function."79 iii. Alto Partners’ Manifestation of Protected Class Status Another critical example of the trial court drawing inferences in favor of the moving party involves Alto Partners’ manifestation of protected class status. The trial court recognized the evidence that Zachary Guerin, director of property operations, stated: “We have not and will not override this based on any protected class …” See R., Vol II at 846. The record does not support that Mr. Giles requested the housing application be accepted based on protected class status. More accurately, Mr. Giles requested his application be evaluated by statutory provisions, “annual income” or “gross” income. Contrarily, Alto Partners injected protected class status. More importantly, the district court confined its view of the protected class comment in the context of a permissible “wages” income determination method that shields Alto Partners from any suspension of mendacity. Further, the trial court proceeded to give weight to the fact that “the evidence presented by Alto strongly supports its position that there was no discrimination against Mr. Giles based on his race.” See R., Vol II at 110. The trial court then discounted the 78 Ebert v. Poston, 266 U.S. 548, 554 (1925) (per Brandeis, J.). 79 Iselin v. United States, 270 U.S. 245, 251 (1926) (per Brandeis, J.).
  • 47. [42] protected class comment on the ground that: “In short, the evidence presented on this issue does not raise a genuine dispute of material fact.” Id. "Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge." Anderson v Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). Further, the trial court confined its review of evidence favoring Mr. Giles to Guerin’s use of protected class comments. The record provides that Niki Rush, compliance manager stated: “I'm sure he will not qualify even if he filed his taxes according to the law.” See R., Vol II at 900. The court should review the record as a whole, it must disregard all evidence favorable to the moving party that the jury is not required to believe. See Wright & Miller 299. That is, the court should give credence to the evidence favoring the nonmovant as well as that "evidence supporting the moving party that is uncontradicted and unimpeached, at least to the extent that that evidence comes from disinterested witnesses." Id. at 300. Therefore, upon eliminating the factually false argument that Mr. Giles failed to qualify for housing, absent protected class status, the record does not provide for other factors to sustain the housing denial. Accordingly, this implausibility demonstrates pretext of discriminatory intent.
  • 48. [43] iv. Mr. Giles Never Refused to Submit Verification Documents The trial court acknowledges the policy requirement for a year-to-date profit and loss statement and Mr. Giles’ 2016 annualized year-to-date profit-and- loss statement. See R., Vol II at 113. At the time of submission December 4, 2017, the most recent annual year-to-date profit and loss statement was 2016. The trial court discounts this permissible evidence in favor of Alto Partners by narrowly construing year-to-date profit and loss statement durations to preclude annualized financial records, providing: “To meet the CHFA requirements, when Mr. Giles applied in November 2017 he would have had to submit a year-to-date profit and loss statement covering January through November of 2017.” Id. Despite being facially ex post facto, this inference was made solely in favor of the moving party and is contrary to evidence within the record. Specifically, U.S. Department of Housing and Urban Development (HUD) has provided guidance on permissible profit and loss statement durations for self-employed individuals. HUD provides that annual or quarterly profit and loss statements are permissible. See R., Vol II at 896 & 897. See Glover v. Standard Fed. Bank, 283 F.3d 953, 961–63 (8th Cir. 2002) (denying Chevron deference to HUD Statements of Policy but deferring to them as “determinative authority” nonetheless).
  • 49. [44] Strikingly, the trial court did not sanction the 2017 annual year-to-date profit and loss statement to a similar fate.80 Moreover, after the trial court discounted the federal agency interpretation subject to at least Skidmore 81deference, it then assigned greater deference to its own profit and loss statement inference. This act negatively weighed the Plaintiff-Appellant’s deposition82 and affidavit,83 both providing evidential support for HUD guidance permitting annual profit and loss statements. The trial court advances the notion that Mr. Giles continuously refused84 to provide Alto Partners with 2017 financial records. No such “refusal” exists in the record. However, the record does indicate that Mr. Giles was not in the possession, custody or control of the 2017 profit and loss statement or 2017 tax returns at the time of the initial request (January 10, 2018) and subsequent follow up (January 17, 2018). See R., Vol II at 346. The nationally recognized deadline to submit tax returns is April 15th. Further, the record provides that Mr. Giles submitted records he possessed upon any Alto Partners request. 80 See R., Vol II at 109 81 Skidmore v. Swift,323 U.S. 134 (1944) (Interpretations of an administrative agency that do not receive deference under Chevron or Auer are “entitled to respect” under Skidmore, but only to the extent that those interpretations have “power to persuade.” Id.at587 (quoting Skidmore, 323 U.S. 134, 140 (1944) 82 See R., Vol II at 160 83 See R., Vol II at 558 84 refusal (15c) 1. The denial or rejection of something offered or demanded, Black's Law Dictionary (11th ed. 2019)
  • 50. [45] This addresses the crux of this matter – whether Alto Partners increased terms and conditions for occupancy in violation of 42 U.S.C. §3604(b). After receiving permissible 2016 financial records,85 the trial court acknowledged that Alto Partners demanded 1) 2017 financial records and 2) provided on two days for Mr. Giles to satisfy these demands.86 These increases (two years of financial records and 48-hour submission window) in terms and conditions are explicitly prohibited87 and HUD has ruled that this behavior constitutes discriminatory housing practices. See R., Vol II at 757. Not only did the trial court ignore applying the “power to persuade” under Skidmore or any other “determinative authority” to HUD guidance and the federal regulation, the trial court discounted this evidence: “By requesting a 2017 year-to-date profit and loss statement ACHA did not deviate from the CHFA Compliance Manual, but rather attempted to comply with it.” See R., Vol II at 114. B. Alto Partners’ Changing Positions are Subject to Judicial Estoppel Judicial estoppel is an equitable remedy used "to protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment." New Hampshire v. Maine, 532 U.S. 85 See R., Vol II at 611 86 See R., Vol II at 113 87 24 CFR § 100.65
  • 51. [46] 742, (2001) (citation and internal quotation marks omitted). "Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position, especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." Id. at 749 (brackets and internal quotation marks omitted). In determining whether to judicially estop a party, courts typically examine three factors. First, has the party taken a position that is "clearly inconsistent with its earlier position"? Id. at 750 (internal quotation marks omitted). Second, would judicial acceptance of the later position create the impression "that either the first or the second court was misled"? Id. (internal quotation marks omitted). And third, would allowing the party to change its position give it "an unfair advantage or impose an unfair detriment on the opposing party if not estopped"? Id. at 751. The ultimate issue is whether "considerations of equity persuade [the court] that application of judicial estoppel is appropriate." Id. at 755. In the instant matter, Alto Partners acknowledged Mr. Giles’ earned income of $35,000, thus, would satisfy the $34,020 housing criteria. See R., Vol II at 664. This is consistent to the testimony of Mr. Giles. THE COURT: So he's got to have $30,000 of income, something like that.
  • 52. [47] MR. GUERIN: Correct, yes, sir. Yes, Your Honor. THE COURT: Do you have it? MR. GILES: Yes. THE COURT: Okay. Tell us about it. What's your income? MR. GILES: My income for 2016 was 35,000. See R., Vol II at 307. Only after the protected activity on January 12, 201888, Alto Partners shifted its acknowledgment from “earnings” of “$35,000” to a housing denial rationale based exclusively on the negative business net income. See R., Vol II at 286. If a tenant has negative net income, how can they pay the rent? The court acknowledged this fallacy. See R., Vol II at 305 ¶7. Then, Alto Partner shifted its rationale that focused exclusively on business net income to an analysis based on “wages” and lack of verifiable tax forms. See R., Vol II at 283. Ultimately, Alto Partners testified that the use of the $27,500 in wages was based upon “discrepancies”: THE COURT: Well, he declares income, right? MR. GUERIN: Yes. And, Your Honor, I just did the math. It would be $34,020 that would be needed to suffice that amount. THE COURT: Well, he probably makes that. He made that last year. MR. GUERIN: So from the records we got, it showed -- MR. ROBINSON: 27,500. Part of the problem, Your Honor, is that during the application process, he submitted various income verification forms that -- there were discrepancies throughout the -- the verification forms that he provided. So, for example, he said at one point it was 35,000. I believe at one point he said it was 27,500. 88 See R., Vol II at 257
  • 53. [48] See R., Vol II at 308 ¶5. In its declaration,89 Alto Partners asserted that these alleged “discrepancies” in the housing application material justified its increase in terms and conditions for occupancy. See R., Vol II at 415 ¶17. The CHFA Manual mandates income verification based on the IRS Form 1040 and IRS Schedule C (Form 1040), not housing application material. See R., Vol II at 1194. This non-discriminatory rationale departs from policy. Further, this change in Alto Partners’ position gave it "an unfair advantage” and imposed an “unfair detriment” because it was not estopped. However, Alto Partners acknowledged the fallacy of this red herring and shifted its rationale to: 1) ignore gross sales of $35,000 reported on Line 1 of the Schedule C (Form 1040) and page 3 of the IRS transcripts90 asserting that there are multiple income determination methods based on the “employment status” of an applicant (See D.C. - ECF No. 75 at 2 ¶1); and 2) to undermine the verifiability of the IRS Schedule C (Form 1040). Congress did not draft multiple income determination methods based on employment status, rather it specified “income” under IRC §42(g) that has been further promulgated under 24 CFR §5.609. Cherry picking from the IRS Schedule C (Form 1040) to acknowledge wages (line 26), yet ignore gross sales (Line 1), only then to turn around and 89 See R., Vol II at 410 90 See R., Vol II at 693
  • 54. [49] label the entire IRS Schedule C (Form 1040) as non-verifiable when the form is mandated by policy91 demonstrates dishonesty about material facts. Thus, “affirmative evidence of guilt.” See c Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133 (2000)(…“consistent with the general principle of evidence law that the factfinder is entitled to consider a party's dishonesty about a material fact as 'affirmative evidence of guilt.'”) Since the CHFA Manual mandates both “IRS Form 1040 and Schedule C,” ignoring Line 1 of the 2016 IRS Schedule C (Form 1040) departs from policy outlined in the CHFA Manual. In its ruling, the district court acquiesced to this nonsensical notion. See Village of Arlington Heights v. Metropolitan Housing Development Corp.,429 U.S. 252 (1977) (“departures from the normal procedural sequence” of decision-making, and provides useful evidence of discriminatory intent.) Thus, absent judicial estoppel, these disturbing oscillations not only define inconsistency, but have undermined the “integrity of the judicial process” and have permitted Alto Partners to “deliberately [change] positions according to the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742 (2001) (citation and internal quotation marks omitted). 91 Section 3.18 of the CHFA LIHTC Manual provides: “All attempts to obtain verification must be documented. Acceptable forms of verification for specific types of income include are as follows.” Section 3.18(B) explicitly lists IRS Schedule C (Form 1040) as an acceptable form of verification: “The tax return must include IRS Form 1040 and Schedule C.”
  • 55. [50] The court consistently makes the inference that gross sales are precluded from “annual income” under 24 CFR §5.609 and gross income under CHFA LIHTC Manual Section 3.6. The record provides that this notion only perpetuates only after the protected activity on January 12, 2018. See R., Vol II at 561 ¶22. Prior to the protected activity, Zachary Guerin, director of property operations, acknowledged Mr. Giles’ 2016 annual income of $35,000. See R., Vol II at 664. Absent judicial estoppel, Alto Partner declared the $27,500 in wages to be Mr. Giles gross income. III. THE DISTRICT COURT’S EX POST FACTO RULE DEMONSTRATES PRETEXT Section 5.609(b)(2) provides narrow and precise instruction: “Expenditures for business expansion or amortization of capital indebtedness shall not be used as deductions in determining net income.”92 (emphasis added) This notion is mirrored in the CHFA LIHTC Manual, specifically, Section 3.9 states, “You may not deduct: interest on loans or other expenses for business expansion.” See R., Vol II at 858. The trial court interpreted Section 5.609(b)(2) as: “But Mr. Giles did not provide ACHA with documentation that $7,500 of his business gross earnings were used for business expansion at the time he applied.”93 (emphasis added.) 92 See R., Vol II at 1256 93 See R., Vol II at 113 or ECF No. 82, p.12
  • 56. [51] The impact of a neutral policy or practice can be used as evidence of intentional discrimination. Claims of intentional discrimination can be based on facially neutral laws or practices. See Personnel Adm'r of Massachusetts v. Feeney, 442 U.S. 256, 272, 60 L. Ed. 2d 870, 99 S. Ct. 2282 (1979) ("As we made clear in Washington v. Davis, 426 U.S. 229, 48 L. Ed. 2d 597, 96 S. Ct. 2040 (1976) and Arlington Heights v. Metro. Hous. Dev. Corp., 429 U.S. 252, 50 L. Ed. 2d 450, 97 S. Ct. 555 (1977), even if a neutral law has a disproportionately adverse effect upon a racial minority, it is unconstitutional under the Equal Protection Clause only if that impact can be traced to a discriminatory purpose.")(emphasis added). The district court’s novel terms and conditions were not applied universally, instead the provision solely targeted an African American – Mr. Giles. Not only is this “unconstitutional under the Equal Protection Clause,” this is facially discriminatory, and demonstrates that “discrimination was a primary factor” in the creation of the new terms and conditions, thus establishing pretext. Since this ex post facto rule is one in a series of terms and conditions used as barriers to housing qualification against a black person, it is probative of the intent behind their use. See Reno v. Bossier Parish School Bd. 520 U.S. 471 (1997) ("The impact of an official action is often probative of why the action was taken in the first place since people usually intend the natural consequences of their actions.").
  • 57. [52] CONCLUSION Given that Mr. Giles established a prima facie case, introduced enough evidence for a jury to reject Alto Partners’ explanation, produced additional evidence that Alto Partners manifested protect class factors, and erected and retroactively applied ex post facto terms and conditions, there is sufficient evidence for the jury to conclude that Alto Partners had intentionally discriminated. Therefore, in concluding that Alto Partners’ explanations so overwhelmed the evidence favoring Mr. Giles that no rational trier of fact could have found that Mr. Giles was denied housing because of his race, the district court impermissibly substituted its judgment concerning the weight of the evidence for the jury's. Accordingly, this Court should reverse the district court’s order, and remand the case to the district court for further proceedings. Respectfully submitted, Dated this 9th day of December 2019. SAMUEL K. GILES /s/ Samuel K. Giles 3160 W. 71st Avenue, Apt. 307 Westminster, Colorado 80030 (419) 699-5600 skgiles@gmail.com Pro Se Plaintiff-Appellant.
  • 58. [53] STATEMENT ON ORAL ARGUMENT REQUEST Plaintiff-Appellant moves pursuant to F.R.A.P. Rule 34(a) to place this case on the argument calendar. This case meets the standards in Rule 34(a)(2) for oral argument, in that (a) this appeal is not frivolous, (b) the dispositive issues raised in this appeal have not been reasonably or authoritatively decided, and (c) as described in the accompanying memorandum, the decisional process would be significantly aided by oral argument. CERTIFICATE OF PRIVACY REDACTIONS I hereby certify pursuant to 10th Circuit Court of Appeals CM/ECF User’s Manual Section II(J)(a), that I made all the required privacy redactions as required by Fed. R. App. P. 25(a)(5) and 10th Cir.R.25.5. Dated this 9th day of December 2019. SAMUEL K. GILES /s/ Samuel K. Giles 3160 W. 71st Avenue, Apt. 307 Westminster, Colorado 80030 (419) 699-5600 skgiles@gmail.com Pro Se Plaintiff-Appellant.
  • 59. [54] CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a) This brief complies with the type-volume limitation of Federal Rule of Appellate Procedure 32(a)(7)(B) because this brief contains 11,395 words, excluding the parts of the brief exempted by Federal Rule of Appellate Procedure 32(a)(7)(B)(iii). This brief complies with the typeface requirements of Federal Rule of Appellate Procedure 32(a)(5) and the type style requirements of Federal Rule of Appellate Procedure 32(a)(6) because this brief has been prepared in a proportionally spaced typeface using Microsoft Word in 13-point Cambria font. Dated this 9th day of December 2019 SAMUEL K. GILES /s/ Samuel K. Giles 3160 W. 71st Avenue, Apt. 307 Westminster, Colorado 80030 (419) 699-5600 skgiles@gmail.com Pro Se Plaintiff-Appellant.
  • 60. [55] CERTIFICATE THAT HARD COPIES ARE THE SAME AS CM/ECF SUBMISSIONS I hereby certify, pursuant to 10th Circuit Court of Appeal CM/ECF User’s Manual Section II(J)(b), as follows: That the hard copy of the Brief of Appellant submitted to the Clerk’s Office in hard copy is an exact copy of the Brief of Appellant filed using CM/ECF. Dated this 9th day of December 2019. SAMUEL K. GILES /s/ Samuel K. Giles 3160 W. 71st Avenue, Apt. 307 Westminster, Colorado 80030 (419) 699-5600 skgiles@gmail.com Pro Se Plaintiff-Appellant.
  • 61. [56] CERTIFICATE OF SCANNING OF CM/ECF SUBMISSION FOR VIRUSES I hereby certify, pursuant to 10th Circuit Court of Appeals CM/ECF User’s Manual Section II(J)(c), as follows: That this and all digital submissions have been scanned for viruses with McAfee Security Scan Plus Version 3.11.717.1, updated May 25, 2018. Respectfully submitted, Dated this 9th day of December 2019. SAMUEL K. GILES /s/ Samuel K. Giles 3160 W. 71st Avenue, Apt. 307 Westminster, Colorado 80030 (419) 699-5600 skgiles@gmail.com Pro Se Plaintiff-Appellant.
  • 62. [57] CERTIFICATE OF SERVICE I hereby certify that on the 9th day of December 2019, a true and correct copy of the foregoing was served upon the persons named below, pursuant to Fed. R. App. P. 25(c)(1)(D) and 25(c)(2), as authorized by 10th Cir. Rule 25.4, via email to the address listed below. The ECF Filing Status of counsel named below is listed as “Active” by the Court’s CM/ECF system and registration constitutes consent to service under 10th Cir. Rule 25.4 and CM/ECF User Manual at Section II(E)(1). Jason Robinson Fairfield and Woods, P.C. 1801 California Street Denver, CO 80202 jrobinson@fwlaw.com Lee Katherine Goldstein Fairfield and Woods, P.C. 1801 California Street Denver, CO 80202 lgoldstein@fwlaw.com SAMUEL K. GILES /s/ Samuel K. Giles
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  • 64. Statutory Addendum - 1 STATUTORY ADDENDUM FEDERAL STATUTES 42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968)..............................................1 42 U.S.C.S. § 3604(a) (Fair Housing Act of 1968 –Refusal to Rent / Deny )…..…………….....3 42 U.S.C.S. § 3604(b) (Fair Housing Act of 1968 – Terms & Conditions)…………………….....4 42 U.S.C.S. § 3604(d) (Fair Housing Act of 1968 – Misrepresentation)………………………....4 42 U.S.C.S. § 3617 (Fair Housing Act of 1968 – Retaliation & Interference).……………….....6 IRC §42 (g)(4)…..…............................................................................................................................................8 IRC §42 (i)(3)(A)…............................................................................................................................................8 IRC §42 (i)(7)…..….............................................................................................................................................8 IRC §142 (d)(2)(B)...........................................................................................................................................8 FEDERAL REGULATIONS 24 CFR Section 5.609 - Annual Income……………………………………………………………..……….10 24 CFR Section 5.609 (a)(1)………………………………………………………………………………….…10 24 CFR Section 5.609 (a)(4)……………………………………………………………………………………..10 24 CFR Section 5.609 (b)(2)……………………………………………………………………………………..10 24 CFR Section 100.65 (Discrimination in Terms & Conditions)………………………………...11 Treasury Regulation Section 1.42-5(b)(1)(vii)…………………………………………………………12
  • 65. Statutory Addendum - 2 42 U.S.C. §§ 3601-3619 (Title VIII of the Civil Rights Act of 1968) §3602. Definitions As used in this subchapter— (a) “Secretary” means the Secretary of Housing and Urban Development. (b) “Dwelling” means any building, structure, or portion thereof which is occupied as, or designed or intended for occupancy as, a residence by one or more families, and any vacant land which is offered for sale or lease for the construction or location thereon of any such building, structure, or portion thereof. (c) “Family” includes a single individual. (d) “Person” includes one or more individuals, corporations, partnerships, associations, labor organizations, legal representatives, mutual companies, joint-stock companies, trusts, unincorporated organizations, trustees, trustees in cases under title 11, receivers, and fiduciaries. (e) “To rent” includes to lease, to sublease, to let and otherwise to grant for a consideration the right to occupy premises not owned by the occupant. (f) “Discriminatory housing practice” means an act that is unlawful under section 3604, 3605, 3606, or 3617 of this title. (g) “State” means any of the several States, the District of Columbia, the Commonwealth of Puerto Rico, or any of the territories and possessions of the United States. (h) “Handicap” means, with respect to a person— (1) a physical or mental impairment which substantially limits one or more of such person's major life activities, (2) a record of having such an impairment, or (3) being regarded as having such an impairment, but such term does not include current, illegal use of or addiction to a controlled substance (as defined in section 802 of title 21). (i) “Aggrieved person” includes any person who— (1) claims to have been injured by a discriminatory housing practice; or (2) believes that such person will be injured by a discriminatory housing practice that is about to occur. (j) “Complainant” means the person (including the Secretary) who files a complaint under section 3610 of this title. (k) “Familial status” means one or more individuals (who have not attained the age of 18 years) being domiciled with— (1) a parent or another person having legal custody of such individual or individuals; or (2) the designee of such parent or other person having such custody, with the written permission of such parent or other person. The protections afforded against discrimination on the basis of familial status shall apply to any person who is pregnant or is in the process of securing legal custody of any individual who has not attained the age of 18 years.
  • 66. Statutory Addendum - 3 (l) “Conciliation” means the attempted resolution of issues raised by a complaint, or by the investigation of such complaint, through informal negotiations involving the aggrieved person, the respondent, and the Secretary. (m) “Conciliation agreement” means a written agreement setting forth the resolution of the issues in conciliation. (n) “Respondent” means— (1) the person or other entity accused in a complaint of an unfair housing practice; and (2) any other person or entity identified in the course of investigation and notified as required with respect to respondents so identified under section 3610(a) of this title. (o) “Prevailing party” has the same meaning as such term has in section 1988 of this title. (Pub. L. 90–284, title VIII, §802, Apr. 11, 1968, 82 Stat. 81; Pub. L. 95–598, title III, §331, Nov. 6, 1978, 92 Stat. 2679; Pub. L. 100–430, §5, Sept. 13, 1988, 102 Stat. 1619.) §3603. Effective dates of certain prohibitions (a) Application to certain described dwellings: Subject to the provisions of subsection (b) of this section and section 3607 of this title, the prohibitions against discrimination in the sale or rental of housing set forth in section 3604 of this title shall apply: (1) Upon enactment of this subchapter, to— (A) dwellings owned or operated by the Federal Government; (B) dwellings provided in whole or in part with the aid of loans, advances, grants, or contributions made by the Federal Government, under agreements entered into after November 20, 1962, unless payment due thereon has been made in full prior to April 11, 1968; (C) dwellings provided in whole or in part by loans insured, guaranteed, or otherwise secured by the credit of the Federal Government, under agreements entered into after November 20, 1962, unless payment thereon has been made in full prior to April 11, 1968: Provided, That nothing contained in subparagraphs (B) and (C) of this subsection shall be applicable to dwellings solely by virtue of the fact that they are subject to mortgages held by an FDIC or FSLIC institution; and (D) dwellings provided by the development or the redevelopment of real property purchased, rented, or otherwise obtained from a State or local public agency receiving Federal financial assistance for slum clearance or urban renewal with respect to such real property under loan or grant contracts entered into after November 20, 1962. (2) After December 31, 1968, to all dwellings covered by paragraph (1) and to all other dwellings except as exempted by subsection (b) of this section. (b) Exemptions Nothing in section 3604 of this title (other than subsection (c)) shall apply to— (1) any single-family house sold or rented by an owner: Provided, That such private individual owner does not own more than three such single-family houses at any one time: Provided further, That in the case of the sale of any such single-family house by a private individual