Virginia Family Settles Fair Housing Lawsuit Against Former Landlords

Jun 1

On May 26, a Charlottesville, Virginia family reached a settlement of their fair housing lawsuit against their former landlords. Claire Payton and Jonathan Katz, a married couple with children, alleged in the lawsuit that their landlords, Liana Arias de Velasco Guallart and Christopher Tschappatt, refused to renew their apartment lease because they were expecting their first child.

As alleged in the complaint, when Payton was seven months pregnant in April 2020, Arias asked whether the couple intended to renew the lease on their apartment. In text messages to Katz, Arias wrote, “As long as nothing changes on your end, we are happy to renew with you guys,” but added, “We don’t take . . . families with children.” When Katz shared that he and Payton were expecting their first baby in June, Arias responded that this was a “problem” because “you can’t keep a newborn quiet,” and suggested the apartment was no longer a “good venue” for them. Shortly after Katz informed Arias that her comments violated fair housing laws, Arias responded that she and Tschappatt would not renew the lease. Payton and Katz, frightened about moving with a newborn at the height of the COVID pandemic, attempted to negotiate at least a temporary extension of their lease to allow them to move when conditions were safer. Arias described the couple’s efforts to compromise as “bullying” and refused to consider any lease extension. Payton and Katz were forced to find alternate housing and move to a new home with their five-week-old daughter in July 2020.

With the assistance of Housing Opportunities Made Equal (HOME) of Virginia, Payton and Katz filed an administrative complaint with the Virginia Fair Housing Office in August 2020. Last year, they withdrew that complaint to pursue their FHA and VFHL claims in court. The lawsuit, Payton v. Arias de Velasco Guallart, No. 3:22-cv-00042-NKM-JCH (W.D. Va.), was filed in July 2022 in the U.S. District Court for the Western District of Virginia. The suit alleged that Arias and Tschappatt violated the fair housing laws’ prohibitions on familial status discrimination — that is, discrimination against families with children or who are expecting children. Specifically, Payton and Katz alleged that defendants denied them housing and refused to negotiate for the renewal of their lease because they were expecting a baby, and that Arias’s statements expressed an unlawful preference or limitation against renting to families with children. The suit further alleged that defendants retaliated against Payton and Katz for asserting their rights under the fair housing laws. Payton and Katz sought compensatory damages for their moving expenses and emotional distress, punitive damages, and attorneys’ fees and costs.

On February 17, 2023, Senior U.S. District Judge Norman K. Moon denied a motion to dismiss filed by Tschappatt.

To settle the case, Arias and Tschappatt agreed to pay Payton and Katz $137,500, which includes both the clients’ damages and their attorneys’ fees and costs. Arias and Tschappatt will also take a training on the prohibitions on familial status discrimination and retaliation under the federal Fair Housing Act (FHA) and Virginia Fair Housing Law (VFHL). At the time of settlement, discovery in the case was ongoing and a trial was set for September. The parties settled the case out of court to avoid the risks of further litigation and trial.

Joseph Wardenski of Wardenski P.C. represented Payton and Katz, with co-counsel Katie Dougherty of McGuireWoods LLP. Former Wardenski P.C. law clerks Ashley Toruño, Michael Hannaman, and Julio Castillo, and contract attorney Rachael Yocum, provided invaluable assistance on the case.