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Flournoy v. CML-GA WB, LLC

United States Court of Appeals, Eleventh Circuit

March 27, 2017

PATRICIA C. FLOURNOY, Plaintiff-Appellant,
CML-GA WB, LLC, Defendant-Cross Claimant-Cross Defendant-Appellee, RIALTO CAPITAL ADVISORS, LLC, PAUL GREGORY KING, Defendant-Cross Claimant-Appellees, REX PROPERTY AND LAND, LLC, Defendant-Cross Defendant-Cross Claimant-Appellee.

         Appeal from the United States District Court for the Southern District of Georgia D.C. No. 1:14-cv-00161-JRH-BKE

          Before ED CARNES, Chief Judge, ANDERSON, Circuit Judge, and ROSENBERG, [*] District Judge.

          ROSENBERG, District Judge

         Plaintiff Patricia Flournoy is an African-American woman who owns and operates a hair salon. Seeking to expand her business, Ms. Flournoy applied to lease space in the JB Whites Building. After her lease application was denied Ms. Flournoy brought suit, alleging that the denial infringed her right to freedom from racial discrimination in the making of a contract. See 42 U.S.C. § 1981. The district court granted summary judgment for Defendants, ruling that Ms. Flournoy had not established a prima facie case and, alternatively, that she had not rebutted the legitimate, nondiscriminatory reasons Defendants proffered for denying her lease application. Ms. Flournoy appealed. We now affirm on the second of these two grounds.


         We review a district court's grant of summary judgment de novo and apply the same standards that governed the district court. Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact." Fed.R.Civ.P. 56(a). In determining whether this standard is met, the Court must view the facts in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. See Davis v. Williams, 451 F.3d 759, 763 (11th Cir. 2006). Only a genuine and material factual dispute will defeat summary judgment. Miccosukee Tribe of Indians of Fla. v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)). A dispute is genuine if "a reasonable trier of fact could return judgment for the non-moving party." Id. (citing Anderson, 477 U.S. at 247-48). A fact is material if "it would affect the outcome of the suit under the governing law." Id. (citing Anderson, 477 U.S. at 247-48).


         Plaintiff Patricia Flournoy has, since about 2007, owned and operated Karisma Hair Studio in Augusta, Georgia. In 2012, desiring to grow her business, Ms. Flournoy began looking for a new location. During an online search, she came across an advertisement by Defendant Rex Property and Land, LLC ("Rex"). Rex is the real estate management company for Defendant CML-GA WB, LLC ("CML"). CML, a special purpose entity managed by Defendant Rialto Capital Advisors ("Rialto"), owns the JB Whites building in downtown Augusta.

         Ms. Flournoy called the telephone number included in Rex's advertisement and spoke with Ms. Andrea Carr, a property manager at Rex. The pair viewed several available properties. But only one-the JB Whites building-piqued Ms. Flournoy's interest. The first floor of JB Whites is commercial space. Fifty-one condominiums occupy the floors above. Ms. Flournoy expressed interest in one of the rear commercial units. Ms. Carr gave Ms. Flournoy a lease application and told her that she would be subjected to a background and credit check.

         After meeting with Ms. Carr, Ms. Flournoy received a call from Defendant Paul King. Mr. King, Rex's general manager, is the property manager and sales broker for the JB Whites building. Mr. King expressed interest in visiting the Karisma Hair Studio and asked a number of questions about Ms. Flournoy's business. After the call, he visited the salon's existing location. Either shortly before or after his visit to Karisma, Mr. King asked whether Ms. Flournoy's salon could service all races and genders. Ms. Flournoy assured him that it could.

         Mr. King also discussed Ms. Flournoy's interest in the space with Bradley Kentor, the Vice President of Commercial Real Estate at Rialto. Mr. Kentor told Mr. King early in the application process that a salon was not a preferred tenant because the cost of ventilation to mitigate fumes and odors was potentially prohibitive. It is unclear whether this conversation occurred before or after Mr. King called Ms. Flournoy and visited her salon. Mr. Kentor also had concerns about the historically high failure rate of salons, and the fact that salon visitors were not likely to patronize other commercial spaces during visits to the JB Whites Building.

         Credit and background checks on Ms. Flournoy were run on August 24, 2012. Ms. Flournoy's credit score was less than 700. According to Ms. Flournoy, Ms. Carr, who had run the checks, told Ms. Flournoy that "everything looked good" and gave her a diagram of the suite so that Ms. Flournoy could indicate where she wanted sinks and other fixtures placed. The rear units were not built out; no plumbing, HVAC, or electrical work was (or is) in place.

         Ms. Flournoy later received a call from Ms. Carr. First, Ms. Carr told Ms. Flournoy that Mr. King had indicated a desire for commercial tenants to be able to service "the people upstairs." Ms. Flournoy assured Ms. Carr that she could cut and style all hair types. Ms. Carr also told Ms. Flournoy that Mr. King had requested the submission of a business plan. Ms. Flournoy hired Ms. Catherine Maness to prepare that plan.

         Ms. Maness called Ms. Carr to get an address needed to complete the business plan. Ms. Maness testified that Ms. Carr told Ms. Maness during that phone call that Ms. Flournoy's credit score posed a problem. Ms. Maness relayed her conversation with Ms. Carr to Ms. Flournoy, who then called Ms. Carr. Ms. Carr said that she could ...

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