After Real Estate Agent Taped Directive to Discriminate, Chicago Builders Settle Race Case for $935,000

Settlements of nearly $1 million were reached in a race discrimination case involving a housing developer whose company policy allegedly discriminated against blacks.

The settlements, which total $935,000, are the largest in a race discrimination case against homebuilders. The agreement was reached and presented to federal Judge George Marovich in August.

The plaintiffs were a black couple, a sales manager for the developer and the Leadership Council for Metropolitan Open Communities. All three will share the settlement.

The defendants were the Hartz construction Co., Clyde Fields, the senior sales officer of Hartz; divisional sales manager Matt Typtanner; Dremco Inc., a homebuilder, and Laramie Square IV Joint Venture, a partnership between Hartz and Dremco that owned the residential lot the couple wanted to buy.

Sales Manager Told to Discourage Black Couple

Glover Jones and Theresa Travis made an offer and a deposit on a house in Laramie Square West, a subdivision in suburban Alsip, in April 1992. the developer refused to prepare the contract and told the sales manager, Donn Healy, to discourage the couple from buying the house because of their race. Healy alerted the couple and asked the Leadership Council to investigate and to represent him.

"The message to housing developers and sales agents is clear, " said Aurie A. Pennick, president of the Leadership Council. "Discrimination -- whether by design or by delay -- is immoral, illegal and intolerable. Period."

The settlements also provide for implementation of sales procedures safeguards, training of sales agents, affirmative marketing to minority homeseekers through advertising in print and electronic media and future testing and monitoring by the Leadership Council.

Information obtained during depositions showed that:

  • In a tape recorded conversation, Fields told Healy to "discourage" Jones and Travis from buying the house and to indicate it would be difficult for them to purchase the home;
  • Fields denied, then admitted after hearing the tape, discriminating against Travis and Jones because they are black;
  • Fields directed a sales manager to "kill a deal" involving a black homeseeker;
  • Fields was heard using an outrageous racial slur in reference to an African- American couple looking at houses;
  • Typtanner instructed sales trainees that Hartz had a policy of avoiding sales to African Americans because the company believed blacks lowered home values in the subdivisions;
  • Different subdivision maps were shown to white and black homeseekers to give African Americans the impression lots were sold and not available for purchase;
  • Black homeseekers' contracts were delayed or not processed at all;
  • Dremco instructed its own sales agent to close its model home offices if African Americans approached
  • Dremco criticized Hartz for selling to an African American at their joint venture development.

Additional incidents of discouragement, delay and racial steering were reported by other current or prospective Hartz purchasers and employees.

The case was extensively covered in-news and editorials in Chicago papers. The Chicago Sun Times called Donn Healy "a courageous voice" and said he "acted with honor when he exposed his superiors ...who told him to stall an African-American family wanting to buy a new home."

"Fair housing has been the law of the land since 1968," said Edward A. Voci, the Leadership Council general counsel. "But we're still fighting discrimination today. We're grateful to Donn Healy and we applaud his courage in coming forward. He's a hero. We're also grateful to our pro bono attorneys at Seyfarth, Shaw, Fairweather & Geraldson and Mayer, Brown & Platt."

"Buying our home was our dream and that dream was denied," said Travis, who grew up in a middle-class New York suburb and always felt accepted. "I was shocked that in this day and age, developers are still discriminating against blacks. I mistakenly took for granted that we would be accepted wherever we decided to live."

So far this year, 123 cases of housing discrimination have been reported to the Leadership Council.

"As far as we have come in the more than 25 years since the Fair Housing Act was passed, we have so much further to go," said Walker. "Unfortunately, the fight to end discrimination and segregation in Chicago is far from over."

Attorney Robert L. Tucker, Leadership Council vice chairman, said , "This was not the case of an individual simply expressing personal prejudice or preference. This was blatant institutional racism in pursuit of profit."

The Leadership Council for Metropolitan Open Communities is the nationally recognized fair housing agency formed after the campaign for open housing in Chicago and the suburbs led by Dr. Martin Luther King, Jr., in 1966. "Our mission continues to be the reform of the entire Chicago metropolitan area real estate market to create genuine open housing choices for all people, regardless of the race," Tucker said.

Last year, the Leadership Council assisted approximately 9,000 families though its comprehensive program which include Legal Action, Fair Housing Centers, Gautreaux Assisted Housing, Gautreaux Supportive Services, Community Relations and Public Policy.

Jones and Travis were represented by Voci, Jeffrey K. Ross, Paul F. Donahue and Thomas H. Peckham of Seyfarth, Shaw, Fairweather & Geraldson. Healy was represented by Voci, and by Paula J. Morency, Daniel J. Delaney and David E. Metz of Mayer, Brown & Platt on a pro bono basis.