Grey v. Alliance Alamosa

• Court: Colorado Court of Appeals
• Decided: January 23, 2025
• Docket: 24CA0655
• Status: Unpublished

Opinion

24CA0655 Grey v Alliance Alamosa 01-23-2025

COLORADO COURT OF APPEALS

Court of Appeals No. 24CA0655 Colorado Civil Rights Commission CR 2022-0011

Ryan Grey and Shelby Grey,

Complainants-Appellees,

and

Colorado Civil Rights Commission,

Appellee,

v.

Alliance Alamosa, LLC and Wanda Brink,

Respondents-Appellants.

ORDER REVERSED AND CASE REMANDED WITH DIRECTIONS

Division III Opinion by JUDGE TOW Martinez* and Bernard*, JJ., concur

NOT PUBLISHED PURSUANT TO C.A.R. 35(e) Announced January 23, 2025

Philip J. Weiser, Attorney General, Nicholas J. Lopez, Second Assistant Attorney General, Denver, Colorado, for Complainants-Appellees and Appellee

Justin Tucker, Sanford, Colorado, for Respondents-Appellants

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2024. ¶1 Alliance Alamosa, LLC (Alliance) and Wanda Brink

(collectively, appellants) appeal the final agency order issued by the

Colorado Civil Rights Commission (Commission) in favor of Ryan

and Shelby Grey. We reverse the order and remand for further

proceedings.

I. Background

¶2 Alliance manages a residential property in Alamosa. Brink is

the property manager for Alliance. Alliance and the Greys executed

a lease for twelve months.

¶3 The Greys subsequently sought housing payment assistance

from the Colorado Coalition for the Homeless (CCH). Mr. Grey

contacted Brink to tell her that the Greys would be sending over

some paperwork. Ms. Grey sent Brink an email stating that she

had attached all the paperwork that their caseworker, Andrew Lee,

had given them. CCH paperwork was attached to the email. Brink

contacted Lee, who worked at La Puente Home, Inc. (La Puente), a

“non-profit organization . . . providing a safety net of services where

individuals and families get what they need to stabilize, heal, and

ultimately thrive,” to ask about the CCH paperwork. Brink did not

complete the CCH paperwork.

1 ¶4 The Greys did not pay rent in June. Alliance, through Brink,

issued a termination of lease memorandum to the Greys, which

stated,

Tenants demand property registration, with [CCH] . . . . [F]ederal, state and local assistance is super important to struggling families, as a result of the pandemic, there is no doubt of that. Clearly it is important to Tenant’s budget and that is why they have had such difficulty dealing with payments, during this short period that they have been part of the lease with Alliance Alamosa LLC. Therefore, it is our recommendation, Tenants (Shelby Grey and Ryan Grey and all others) find the property that can fit a housing budget, this program and or both.

¶5 Alliance, again through Brink, also posted an eviction notice

on the door of the property the Greys were renting, terminating the

lease as of August 7, 2021. The notice further stated, “TENANTS

CAN NOT [SIC] AFFORD THIS PROPERTY AND ARE ALREADY

PARTICIPANTS IN A HOMELESS PROGRAM THAT THE LANDLORD

IS NOT AUTHORIZED TO PARTICIPATE IN.”

¶6 The Greys moved out of Alliance’s property.

¶7 The Greys filed a charge of discrimination with the Colorado

Civil Rights Division (CCRD), alleging that appellants committed

housing discrimination. After an investigation, the CCRD found

2 probable cause that appellants engaged in housing discrimination

against the Greys. The Commission issued a formal complaint

alleging housing discrimination based on source of income and

discriminatory notice or advertising based on source of income, and

it set the matter for a hearing before an administrative law judge

(ALJ) pursuant to 24-34-306(4), C.R.S. 2024.1

¶8 Before the hearing, the State moved for summary judgment.

The ALJ issued an order partially granting the State’s summary

judgment motion on liability, concluding that appellants engaged in

unlawful source of income housing discrimination and published a

notice that discriminated based on source of income in violation of

section 24-34-502(1)(l) and (n), C.R.S. 2024. Specifically, for the

claim that appellants denied the Greys housing based on source of

income, the ALJ found that Ms. Grey emailed Brink a copy of the

CCH paperwork, which included a document titled “Landlord

Agreement Rental Assistance Payment” and made appellants aware

that the Greys’ source of income would include housing assistance.

1 The Greys also brought a claim of discrimination in terms and

conditions of a rental dwelling. The State voluntarily dismissed this claim after the ALJ granted summary judgment in its favor on the other claims.

3 In the termination memorandum, appellants stated that the Greys

“failed to disclose income from this program to [Alliance] during the

application process. Further [they] failed to ask if [Alliance] would

be willing to participate in this program, and provide these

documents at that time so that [Alliance] could make an informed

up or down decision.” And appellants’ posted eviction notice stated,

“Tenants can not [sic] afford this property and are already

participants in a homeless program that the landlord is not

authorized to participate in.” (Emphasis omitted.) Based on this

evidence, the ALJ concluded that “[t]he memo and notice give rise to

an inference of unlawful discrimination based on Complainants’

source of income.”

¶9 For the claim that appellants posted a discriminatory notice

based on source of income, the ALJ found that appellants published

the notice on the subject property, and that the notice indicated

discrimination against the Greys on the basis of their income. The

ALJ found that there was no reason for appellants to include the

above-quoted statement in the notice except to explain that Alliance

chose to terminate the lease because of the Greys’ source of income.

4 ¶ 10 The ALJ then conducted a hearing to determine the amount of

damages and sanctions, after which the ALJ issued an initial

decision recommending that the Greys receive $10,286.50 in

damages, that Alliance pay a civil penalty, and that various other

sanctions against Alliance be imposed.

¶ 11 Alliance filed exceptions and appealed to the Commission,

requesting that it set aside or alter the ALJ’s summary judgment

order. Alliance did not designate a transcript of the sanctions

hearing as part of the record. In the absence of a transcript, the

Commission was bound by the ALJ’s findings of fact in its initial

decision, and it adopted them accordingly. The Commission also

found that the ALJ’s conclusions of law were supported by

substantial evidence in the record and a reasonable basis in law,

and it adopted them. The Commission therefore adopted the ALJ’s

recommendation in its entirety and awarded such damages and

sanctions against appellants.

¶ 12 This appeal followed.

II. Analysis

¶ 13 Appellants contend that the Commission erred by affirming

the ALJ’s entry of an order granting summary judgment on the

5 issues of whether they (1) engaged in unlawful source of income

housing discrimination in violation of section 24-34-502(1)(l) and

(2) published a discriminatory notice based on source of income in

violation of section 24-34-502(1)(n). We agree.

A. Section 24-34-502(1)(l)

1. Applicable Law

¶ 14 The Colorado Fair Housing Act (CFHA), sections 24-34-501

to -509, C.R.S. 2024, is a subpart of the Colorado

Anti-Discrimination Act. See Miller v. Amos, 2024 CO 11, ¶ 15. The

CFHA prohibits discrimination based on source of income as a type

of unfair housing practice, including prohibiting “any person to

refuse to rent or lease . . . or to otherwise make unavailable or deny

or withhold from another person any housing for rent or lease

because of a person’s source of income.” § 24-34-502(1)(l). “Source

of income” is defined to include a lawful and verifiable source of

money paid directly, indirectly, or on behalf of a person, including

income from any lawful profession or occupation and income

derived from any government or private assistance, grant, or loan

program. § 24-34-501(4.5).

6 ¶ 15 As a threshold matter, the ALJ appears to have applied the

burden-shifting framework for employment discrimination cases

outlined in McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973),

to the Greys’ claim brought pursuant to section 24-34-502(1)(l).

And the parties do not appear to question whether this model is the

correct test. While no published Colorado appellate case has yet

adopted that test in this context, we assume, without deciding, that

it is the proper test for analyzing a claim brought pursuant to

section 24-34-502(1)(l).

¶ 16 The burden-shifting framework has three steps.

¶ 17 First, plaintiffs must establish a prima facie case of

discrimination by showing (1) complainants sought housing for rent

or lease or were tenants and met minimum qualifications;

(2) respondents were aware of complainants’ source of income;

(3) respondents denied complainants housing; and (4) the

circumstances give rise to an inference of unlawful discrimination

based on complainants’ source of income.

¶ 18 Second, if the plaintiffs establish a prima facie case, the

burden of production shifts to the respondents to articulate some

legitimate, nondiscriminatory reason for the denial of housing.

7 ¶ 19 Third, if the respondents present a legitimate,

nondiscriminatory reason, the burden shifts back to the plaintiffs to

demonstrate by competent evidence that the stated reasons for the

decision were a pretext for discrimination.

2. Standard of Review — ALJ Summarily Grants Summary Judgment

¶ 20 The parties dispute the applicable standard of review.

Appellants contend that we review de novo whether they engaged in

discrimination. The Commission argues that we review its findings

pursuant to section 24-4-106(7), C.R.S. 2024, and determine

whether the Commission’s order is supported by substantial

evidence in the record and a reasonable basis in law. We agree with

appellants.

¶ 21 “When a case is set for formal hearing pursuant to [section]

24-34-306(4), . . . the hearing procedures shall be governed by the

Office of Administrative Courts [(OAC)] Procedural Rules, 1 Code

Colo. Reg. 104-1.” Dep’t of Regul. Agencies Rule 10.7(A), 3 Code

Colo. Regs. 708-1. “If a party presents a motion for summary

judgment, the presentation of the motion with supporting evidence

may constitute the commencement of the hearing.” Id. at Rule

8 10.7(A)(6). “To the extent practicable, and unless inconsistent with

these rules, the Colorado Rules of Civil Procedure apply to matters

before the OAC.” Dep’t of Pers. & Admin Rule 15, 1 Code Colo.

Regs. 104-1. Because the ALJ’s determination that appellants

discriminated was made at the summary judgment stage, we apply

the law governing C.R.C.P. 56 motions.2 Cf. Campaign Integrity

Watchdog v. Coloradans for a Better Future, 2016 COA 56M, ¶ 11.

Therefore, whether the ALJ erred by granting summary judgment is

a question of law that we review de novo. See W. Elk Ranch, L.L.C.

v. United States, 65 P.3d 479, 481 (Colo. 2002).

3. Summary Judgment Law

¶ 22 Summary judgment is appropriate when the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with any affidavits, show that no genuine issue of material

fact exists, and that the moving party is entitled to judgment as a

matter of law. C.R.C.P. 56; Andersen v. Lindenbaum, 160 P.3d

237, 239 (Colo. 2007). The nonmoving party is entitled to the

2 Neither party has argued to the contrary and both parties relied

on C.R.C.P. 56 or cases relying on C.R.C.P. 56 in their summary judgment motions.

9 benefit of all favorable inferences that may be reasonably drawn

from the undisputed facts, and all doubts as to whether an issue of

fact exists must be resolved against the moving party. St. Croix v.

Univ. of Colo. Health Scis. Ctr., 166 P.3d 230, 235 (Colo. App. 2007).

4. Summary Judgment Law in Inference of Discrimination Cases

¶ 23 “A court looks to a variety of factors in evaluating a motion for

summary judgment when a plaintiff is relying upon proving

discriminatory intent by way of the inferential model established by

McDonnell Douglas . . . .” Id. at 237. “These include the strength of

the plaintiff’s prima facie case, the probative value of the plaintiff’s

evidence indicating the [defendant’s] explanation of the reason for

dismissal is false, and any other evidence supporting the

[defendant’s] case that is properly considered on a summary

judgment motion.” Id.

5. Application

a. Prima Facie Case

¶ 24 Appellants contend that there was a dispute of material fact

regarding the fourth requirement of establishing a prima facie case

— i.e., that the circumstances give rise to an inference of unlawful

10 discrimination based on complainants’ source of income. We

disagree.

¶ 25 Appellants asserted in the termination memorandum that the

Greys needed to participate in a housing assistance program and

that they did not give appellants a choice whether to participate in

the program. Similarly, the eviction notice stated that the Greys

could not afford the property and were participating in a “homeless

program.” The termination memorandum and eviction notice

therefore give rise to an inference of unlawful discrimination. Cf.

Tex. Dep’t of Cmty. Affs. v. Burdine, 450 U.S. 248, 253 (1981) (The

prima facie requirement is “not onerous.”).

¶ 26 However, the ALJ essentially concluded that clearing the first

hurdle — i.e., producing enough evidence to create an inference of

discrimination — was sufficient for the Greys to establish the

existence of discrimination. In doing so, the ALJ failed to properly

consider the second and third steps of the burden-shifting analysis.

b. Legitimate, Nondiscriminatory Reasons

¶ 27 Next, we consider the reasons proffered by appellants for

terminating the Greys’ lease.

11 ¶ 28 In their opposition to summary judgment, appellants stated

that (1) appellants were uncertain about what the Greys wanted;

(2) the Greys were not honest with appellants; (3) appellants were

“kept in the dark so much they thought that the Greys might be

committing fraud”; (4) Brink was given a contract from CCH with

additional terms to be added to the existing lease and a contract for

appellants to sign saying part of the current lease was not allowed;

and (5) the termination memorandum stated the reason for

rejection — appellants thought the Greys were already in a program

and thought that that program would not pay enough for the

property.

¶ 29 Appellants rely on the following testimony from Brink’s

deposition to meet their burden of production:

(1) The Greys did not tell Brink that they would not pay rent

in June.

(2) The Greys did not tell Brink if they were trying to use a

program to pay rent, and she “didn’t know what the

program was designed for because nobody would talk to”

her.

12 (3) The Greys sent her documents, and she thought “those

documents were to list the property with [CCH].”

(4) The Greys’ “lease did not comport with what they wanted

to do and how they wanted to do it. And nobody gave her

any information. I mean they were toxic and they lied.”

(5) CCH “is a company from Denver wanting to intervene in

property management and register property and

intervene in the lease. And it is not La Puente House. So

this is completely out of the blue. [CCH] is not in

Alamosa.”

(6) “It was based on careful investigation, and they were

enrolled in a program in another property[, which means]

[t]hat I likely received funds in a fraudulent

manner . . . .”

Appellants also rely on the statement in the termination

memorandum that “[t]enants were enrolled in a program related to

these documents and had a property that was already in this

program.”

¶ 30 Given this evidence, appellants met their burden of production

by articulating specific and facially legitimate, nondiscriminatory

13 reasons for terminating the Greys’ lease. See St. Mary’s Honor Ctr.

v. Hicks, 509 U.S. 502, 509 (1993) (“By producing evidence

(whether ultimately persuasive or not) of nondiscriminatory

reasons, petitioners sustained their burden of production . . . .”);

see also Anaeme v. Diagnostek, Inc., 164 F.3d 1275, 1279 (10th Cir.

1999) (characterizing defendant’s burden of production as an

exceedingly light one).

¶ 31 Because appellants’ stated reasons were sufficient to satisfy

their burden of production, the burden then shifts back to the

Greys to show that appellants’ reasons are a pretext for

discrimination. See Brawner-Ahlstrom v. Husson, 969 P.2d 738,

742 (Colo. App. 1998). And to be entitled to summary judgment,

the Greys must demonstrate that there is no material factual

dispute regarding Brink’s motive.

c. Pretext

¶ 32 The Greys submitted an affidavit from Lee, which stated that

he spoke to Brink regarding the Greys’ request for assistance, and

Brink “stated something to the effect that she did not want people

at their housing to use public assistance” and “that she did not

want to participate in the program because she did not want to

14 participate with someone who was working with La Puente.” Brink

testified in her deposition that Lee was lying. Resolution of that

dispute at the very least requires a credibility determination and,

thus, a hearing. Indeed, determination of whether Brink’s stated

reasons were pretext for discrimination requires resolution of

several such disputes. Summary judgment was therefore improper.

B. Section 24-34-502(1)(n)

¶ 33 Appellants also contend that the ALJ erred by granting

summary judgment on the Greys’ claim that appellants published a

discriminatory notice based on source of income in violation of

section 24-34-502(1)(n). Again, reviewing de novo, we agree.

¶ 34 It is unlawful for any person to “make, print, or publish or

cause to be made, printed, or published any notice or advertisement

relating to the rental or lease of any housing that indicates any

limitation, specification, or discrimination based on a person’s

source of income.” § 24-34-502(1)(n).

¶ 35 Neither party challenges how the ALJ analyzed this claim, so

we assume, without deciding, that she applied the correct analytical

framework.

15 ¶ 36 The ALJ relied on her conclusion that the lease termination

was unlawful pursuant to section 24-34-502(1)(l) to conclude that

appellants violated section 24-34-502(1)(n). Given the ALJ’s

reliance on a decision we conclude was erroneous, it necessarily

follows that granting summary judgment on this claim was also

erroneous.

C. Final Agency Order

¶ 37 Under the State Administrative Procedure Act, we may set

aside the agency action if it is “[n]ot in accord with the procedures

or procedural limitations of this article 4 or as otherwise required

by law.” § 24-4-106(7)(b)(V). Here, the final agency action

essentially adopted the ALJ’s procedurally erroneous grant of

summary judgment. Thus, we must set aside the Commission’s

order.

III. Unpreserved Claims

¶ 38 Appellants contend that they preserved their argument that

they are protected from unreasonable searches and seizures in

violation of the Fourth Amendment in their response to the Greys’

motion for summary judgment and in their exceptions. But neither

pleading makes that argument. And appellants admit that their

16 argument that the Commission’s final order violated their due

process rights because the ALJ’s spouse worked for the

Commission “is not part of the record.” Accordingly, we decline to

address both contentions. See Debalco Enters., Inc. v. Indus. Claim

Appeals Off., 32 P.3d 621, 624 (Colo. App. 2001) (arguments not

raised in administrative proceedings are not preserved for appellate

review).

IV. Disposition

¶ 39 The order is reversed, and the case is remanded for further

JUSTICE MARTINEZ and JUDGE BERNARD concur.