Suit Charges Large Apartment Firm With Racial Bias in Rentals

When Joy Mould was hired as assistant manager of a Palmdale apartment complex last year, she says, she was instructed to draw a “happy face” on all rental applications submitted by members of minority groups.

The smiling faces were not meant to symbolize a positive reaction toward the prospective tenant, Mould asserted Wednesday. Rather, she said, they were a symbol to tip off her bosses, who allegedly planned to discriminate against black, Latino and Asian applicants.

“I was told that no one would suspect that this was the signal,” Mould, 37, who quit her job in January, said at a press conference. “It’s really gross.”

On Wednesday, Mould, another former assistant manager and a black woman who said that she was unfairly denied an apartment, joined forces with the Fair Housing Congress of Southern California in filing a civil rights lawsuit against Investment Concepts Inc., the firm that manages the 112-unit Carmel Apartments complex where Mould worked and thousands of other units spread across Southern California

“It is a slap in the face to use such an innocent symbol to further such pernicious racial discrimination,” said attorney Theresa M. Traber of Litt & Stormer, the firm representing the plaintiffs. “The effects of this kind of housing discrimination are far from innocent.”

The lawsuit charges the discrimination also takes place in other properties managed by Investment Concepts.

Later in the day, an attorney for the defendants--including the company’s president, George Chami--vehemently denied the allegations.

“Believe me when I tell you there is absolutely no truth whatsoever to the claim that this company discriminates--we go out of our way not to discriminate,” attorney Jerome Janger said. “This is really very bad for us because we represent institutional owners like savings and loan and insurance companies.

“It’s kind of a joke. Mr. Chami doesn’t have an ounce of prejudice in his whole system,” he said.

The firm, which is based in Orange, manages more than 4,000 apartment units in more than 40 apartment complexes in Los Angeles, Riverside, San Bernardino and Orange counties, Janger said. State records list Chami as a general partner in 20 California limited partnerships. Investment Concepts, headed by Chami, is listed as a general partner in more than 60 limited partnerships.

The class-action lawsuit is one of the first filed by a private law firm under the federal Fair Housing Act of 1988, which was intended to strengthen anti-discrimination laws. Before the legislation took effect in March, damages for housing discrimination were limited to $1,000 per incident, according to Traber. But now, victims can seek unlimited punitive damages, as well as compensatory damages, making such suits more attractive for private firms to participate in, she added.

Federal officials say the new legislation has also resulted in an increase in racial discrimination housing complaints filed with the U.S. Department of Housing and Urban Development. Since March, said regional spokesman John Phillips, 225 complaints have been filed in Los Angeles County, half of them by individuals claiming that they were denied housing because they are black.

Marcella Brown, executive director of the Fair Housing Congress of Southern California, told reporters at the press conference that in Los Angeles, “discrimination is really very common based on race.”

“We’ve had several cases like this,” she said.

In one such case, Brown said, a rental manager coded the applications of blacks with a black dot, whites with white dots and Asians with yellow dots.

In the Palmdale case, both Mould and Annette Zimmerman, 25, said they worked briefly as assistant managers at the complex, located on 11th Street East, where they claim that only three black families currently reside.

Both said they were told by their boss to draw the happy faces on forms filled out by minority applicants. The supervisor is no longer employed by Investment Concepts and is not named as a defendant in the lawsuit.

“I was told it was a smiling face so if ever asked, I would say, ‘Oh, we like you,’ ” Zimmerman said. “I told them I couldn’t do it. It’s not right.”

Zimmerman said she was fired after less than two months on the job because she would not participate. Mould, who was employed by the firm for about two months, said she was forced to quit for the same reason. Both had been living at the apartment complex but have since moved.

Zimmerman said she was serving as assistant manager when Dorothy Bryant, 28, an Inglewood invoice clerk, applied for an apartment last year. Although there were several vacancies, Zimmerman said, Bryant was rejected because she is black.

Although Zimmerman said she showed Bryant the apartment, her supervisor made the decision to exclude Bryant.

Bryant, who has since moved to another Palmdale apartment complex, said she had decided to move to the Antelope Valley with her 8-year-old daughter because “Los Angeles was getting so rough.”

Mould and Zimmerman said they discussed the “happy face” system, to no avail, with Denise Chrysler, an area supervisor for the management company.

“She just made it very clear . . . the orders were from up there,” Mould said.

Janger, in a telephone interview, denied that Investment Concepts employs prejudicial policies and said the firm will conduct an internal investigation. Any employees who practiced discrimination “would certainly be terminated,” he said.

Janger also questioned Mould’s allegations, saying that her January resignation letter contained no specific references to racism.