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Flournoy v. CML-GA WB, LLC

United States District Court, S.D. Georgia, Augusta Division

May 15, 2015



J. RANDAL HALL, District Judge.

On July 29, 2014, Plaintiff Patricia C. Flournoy filed the instant complaint alleging Defendants violated 42 U.S.C. § 1981 by refusing to rent property to her because of her race. Now before the Court is Defendant CML-GA WB, LLC ("CML") and Rialto Capital Advisors, LLC ("Rialto") (collectively, "the Rialto Defendants") motion for judgment on the pleadings (doc. 11). For the reasons set forth below, the Rialto Defendants' motion is DENIED.

I. Judgment on the Pleadings Standard

The legal standards applicable to Federal Rule of Civil Procedure 12(c) motions for judgment on the pleadings and Rule 12(b)(6) motions to dismiss are the same. Roma Outdoor Creations, Inc. v. City of Cumming, Ga., 558 F.Supp.2d 1283, 1284 (N.D.Ga. 2008) ("A motion for judgment on the pleadings is subject to the same standard as is a Rule 12(b)(6) motion to dismiss.") A motion for judgment on the pleadings, like a motion to dismiss, does not test whether the plaintiff will ultimately prevail on the merits of the case. Rather, it tests the legal sufficiency of the complaint. Scheur v. Rhodes, 416 U.S. 232, 236 (1974). Therefore, the court must accept as true all facts alleged in the complaint and construe all reasonable inferences in the light most favorable to the plaintiff. See Hoffman-Pugh v. Ramsey, 312 F.3d 1222, 1225 (11th Cir. 2002). The court, however, need not accept the complaint's legal conclusions as true, only its well-pled facts. Ashcroft v. Iqbal, 556 U.S. 662, 677-79 (2009).

A complaint also must "contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. at 678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The plaintiff is required to plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Although there is no probability requirement at the pleading stage, "something beyond... mere possibility... must be alleged." Twombly, 550 U.S. at 556-57 (citing Durma Pharm., Inc. v. Broudo, 544 U.S. 336, 347 (2005)). When, however, on the basis of a dispositive issue of law, no construction of the factual allegations of the complaint will support the cause of action, dismissal of the complaint is appropriate. See Executive 100, Inc. v. Martin Cnty., 922 F.2d 1536, 1539 (11th Cir. 1991).


Ms. Flournoy, an African-American woman, owns and operates Karisma Hair Studio in Augusta, Georgia, and has been a hair care professional for more than two decades. (Compl., Doc. 1, ¶¶ 3, 8.) CML owns the "JB Whites" building located at 936 Broad Street, Augusta, Georgia, and Ms. Flournoy alleges that Rialto "is the managing member of. CML-GA WB, and it owns, controls, and has decision making authority over CML-GA WB." (Id. ¶¶ 4-5.) Defendant Rex Property & Land, LLC ("Rex Property") was, at all relevant times, the leasing agent for the JB Whites building, and Defendant Paul Gregory King ("Mr. King" "was an agent and broker for Rex Property[, ]" who Ms. Flournoy contends "acted as an agent of Rex Property, Rialto Capital, and CML-GA WB[.]" (Id. ¶¶ 6-7.)

Given the success of the Karisma Hair Studio, which boasts a racially diverse client base, Ms. Flournoy began searching for a studio that would allow her space to expand her salon. (Id. ¶¶ 9-10.) In that search, Ms. Flournoy met with Ms. Andrea Carr, a real estate agent employed by Rex Property, on August 12, 2012. (Id. ¶ 11.) In that meeting, Ms. Carr presented two options to Ms. Flournoy - the Imperial Theater building and the JB Whites building. (Id.) Ms. Flournoy submitted a rental application, along with $50.00 for a background and credit check, for space in the JB Whites building. (Id. ¶ 2.) After Ms. Carr indicated that everything checked out with Ms. Flournoy's credit, Ms. Flournoy indicated that she would like to move in on December 31, 2012 and identified a particular space of interest within the building. (Id. ¶ 13.) Ms. Carr and Ms. Flournoy then proceeded with the plans: Ms. Carr provided Ms. Flournoy with a blueprint of the space and discussed where Ms. Flournoy would like plumbing and electrical outlets to be located. (Id. ¶ 14.)

After several weeks of Ms. Flournoy's prodding without any contact from Ms. Carr, Ms. Carr informed Ms. Flournoy "that she needed to submit a business plan in order to rent space within the JB Whites building." (Id. ¶ 15.) When Ms. Flournoy inquired as to why a plan was necessary, Ms. Carr simply responded that she was told to request the plan. (Id.) After that call, Ms. Flournoy met with Ms. Carr in person, at which time "Ms. Carr informed Ms. Flournoy that she would know something soon' with respect to the application." (Id. ¶ 16.) At an unspecified time thereafter, Mr. King called Ms. Flournoy and said "he wanted a salon tenant who could service the residents of the building, who are predominately white[, ]" and Ms. Flournoy responded that her salon services clients of all races. ¶ ¶ 17.) Shortly thereafter, Mr. King visited the Karisma Hair Studio. (Id. ¶ 18.) Ms. Flournoy was apparently not present at this time and Mr. King requested that Ms. Flournoy call him, which she did, but Mr. King did not return the call. (Id.)

All the while, Ms. Flournoy moved forward with her intent to rent the space in the JB Whites building. She hired a business consultant, Catherine Maness, to prepare a business plan. (Id. ¶ 19.) Ms. Maness prepared a business plan after meeting with Ms. Carr to discuss any required content. (Id.) Upon the plan's completion, Ms. Maness contacted Ms. Carr to schedule a time to review the plan, to which Ms. Carr responded that "Ms. Flournoy would likely not be able to rent space within the JB Whites building due to her credit score." (Id. ¶ 20.) Apparently taken aback by this statement, Ms. Flournoy contacted Ms. Carr "to inquire why her credit score was not an issue when Ms. Carr had previously indicated that her credit score was sufficient." (Id. ¶ 21.) Ms. Carr did not return the call. (Id.)

Around November 2012, Ms. Flournoy and Ms. Maness - after receiving no response from Ms. Carr - visited Rex Property's office in Augusta, Georgia to deliver the business plan. (Id. ¶ 22.) The two met with Mr. King, "who seemed to be annoyed by their visit." (Id.) During the meeting, Mr. King (1) refused to review the business plan, (2) stated that Ms. Flournoy's credit score was insufficient to rent the space, and, (3) after Ms. Flournoy informed him that Ms. Carr previously approved the credit score, indicated that "he did not care what Ms. Flournoy's credit score was, and that she would not be allowed to rent space within the JB Whites building under any circumstances." (Id.)

Ms. Flournoy contends that "many white commercial tenants of the JB Whites building were allowed to rent space within the building with lower credit scores" and "many white commercial tenants of the JB Whites building were not subjected to the same level of scrutiny, " such as submitting a business plan. (Id. ¶¶ 23-24.)

Ms. Flournoy filed her complaint asserting just one cause of action - violation of 42 U.S.C. § 1981. The Rialto Defendants then filed their answer on November 3, 2014. (Doc. 10.) On the same day, the Rialto Defendants filed the instant motion for judgment on the pleadings ...

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