IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
GWEN HARDY, CYNTHIA BRANHAM
and CHARMAINE BERRY,
No. 92 C 7170
UNITED STATES OF AMERICA,
No. 93 C 1794
GHEORGHI NEDIALKOV (also known
as GEORGE NEDIALKOV); and
This action was filed by the United States on March 25, 1993 against defendant to enforce the provisions of Title VIII of the Civil Rights Act of 1968 (the Fair Housing Act), as amended by the Fair Housing Act Amendments of 1988, 42 U.S.C. §§ 3601 et seq. Gwen Hardy, Cynthia Branham, and Charmaine Berry
(hereinafter "the private plaintiffs") filed their complaint on October 28, 1992 under the Fair Housing Act and the Civil Rights Act of 1866, 42 U.S.C. § 1982.
Defendants are engaged in the
business of renting and managing real estate property they own
which is located at 1241 W. Loyola, Chicago, Illinois, in the
Northern District of Illinois.
In its complaint, the United States alleges that Defendants
engaged in a pattern or practice of sexual harassment in the
rental of apartments at 1241 W. Loyola, in violation of the Fair
Housing Act. The United States alleges specifically that from
1988 and continuing through the present, the defendant Gheorghi
Nedialkov implemented this pattern or practice by subjecting
female tenants at their 1241 W. Loyola Avenue apartment building
to extensive, continuous and unwelcome sexual harassment;
conditioned tenancy on the grant of sexual favors; created a
hostile environment for female tenants; and retaliated against
women who filed complaints of sexual harassment against him or
refused to grant him sexual favors, in violation of Sections 804
(a) and (b) and Section 818 of the Fair Housing Act. The United
States' complaint alleges that defendant James Nedialkov knew or
should have known of the discriminatory conduct of the defendant
Gheorghi Nedialkov but refused to take action to curtail the such
behavior, in violation of 42 U.S.C. §3604(a) and (b) and §3617.
The private plaintiffs make similar claims against Gheorghi
Nedialkov in their complaint, alleging that he violated the Fair
Housing Act, 42 U.S.C. §3601 seg. They also allege that he
violated the Civil Rights Act of 1866, 42 U.S.C. §1982.
The parties have agreed that in order to avoid protracted
and costly litigation, the controversy should be resolved without
further litigation. Therefore, without a trial or adjudication of
any of the facts alleged by the United States and the private
plaintiffs, the parties consent to the entry of this Decree.
It is hereby ORDERED, ADJUDGED AND DECREED that Defendants, their
agents, employees, successors, and all persons in active concert
or participation with any of them, are hereby permanently
- Failing to rent after the making of a bona fide offer, or
refusing to negotiate for the rental of, or otherwise making
unavailable or denying, any dwelling because of sex or race;
- Discriminating against any person in the terms, conditions
or privileges of the rental of a dwelling, or in the provision of
services or facilities in connection therewith, because of sex or
- Making, printing, publishing or causing to be made, printed
or published any notice, statement or advertisement with respect
to the rental of a dwelling that indicates any preference,
limitation or discrimination based on sex or race; and
- Representing to any person because of sex or race that any
dwelling is not available for inspection or rental when such
dwelling is in fact so available.
- Coercing, intimidating, threatening or interfering with any
person in the exercise or enjoyment of, or on account of his
having exercised or enjoyed, or on account of his having aided or
encouraged any other person in the exercise or enjoyment of, any
right granted or protected by section 803, 804 805, or 806 of the
Fair Housing Act, 42 U.S.C. §§3603 - 3606.
- Making any unwelcome sexual advances, making requests for
sexual favors or, making requests for conduct of a sexual nature
when submission to such requests is made explicitly or implicitly
a term or condition of an individual's housing; or when
submission to or rejection of such conduct by an individual forms
the basis for any housing decision affecting the individual.
- Making any unwelcome sexual advances or requests for sexual
favors, or conduct of a sexual nature when such conduct has the
purpose or effect of substantially interfering with an
individual's housing rights or creating an intimidating, hostile
or offensive housing environment.
- Contacting any of the aggrieved persons.
It is hereby ORDERED ADJUDGED AND DECREED that, except in
accordance with Sections DD and EE below, the Defendants shall be
permanantly enjoined from managing or entering the property
located at 1241 W. Loyola, Chicago, Illinois, other than to
remove personal belongings within 15 days of the entry of this
It is further ORDERED, ADJUDGED AND DECREED that:
- Defendants shall be enjoined from managing any other rental
property for the length of this Decree;
- Tim Martalogo, a current employee of the Defendants, shall
perform all management functions at 1241 West Loyola for a period
of not more than forty five (45) days after the entry of this
consent decree; and
- After expiration of that time period, the property shall be
managed by an independent party with whom the Defendants have had
no prior business or personal relationship. The Defendants shall
serve written notice on counsel for the Plaintiffs in writing of
any management company, person selected to manage the property or
purchaser of the building.
- The Defendants shall be permitted to enter 1241 West Loyola
no more than once every fifteen (15) days for the purposes of
inspecting the property, showing it to prospective purchasers, or
to prospective managment teams. During such visits, Defendants
may only enter common areas, and may not have any contact with
- The Defendants shall only be present at 1241 West Loyola
when accompanied by a supervisory member of the managment agent.
- The Defendants shall make good faith effort to sell 1241
- The Defendants shall execute a release of any and all judgments for possession and/or damages entered against Gwendolyn Hardy within two weeks of the entry of this order.
It is further ORDERED that Defendants shall pay the total
sum of $180,000.00 to the Department of Justice and the Lawyers
Committee for Better Housing, Inc. (hereinafter "the Lawyers'
Committee") as will be determined by them in their sole
discretion. Portions of such sum will be distributed by the
United States and the Lawyers Committee to all aggrieved persons
identified by the United States. This sum shall be paid within 30
days of the entry of this Consent Decree. In addition, in the
event the Defendants are found liable for any subsequent
violation of the Fair Housing Act, that violation will be deemed
a second violation for purposes of determining the civil penalty.
In consideration of these payments, the private plaintiffs
and all of the persons identified by the United States as
aggrieved, shall execute a release substantially equivalent to
that set forth in Appendix A appended hereto signifying that the
amounts they are to receive constitute full settlement of any
claims they may have relating to the subject matter of this
lawsuit. In addition, within seven (7) days of receipt of funds
from the Defendants, the Plaintiffs will remove the Lis Pendens
previously filed with Cook County Recorder of Deeds.
The portions of such funds distributed to the aggrieved
persons and the private parties are compensation for emotional
distress and other injuries. For those persons receiving public
benefits, such funds shall only be available for supplemental
personal needs -- expenses other than food, clothing, residence
upkeep, medical costs, or maintenance needs -- and are not
intended to supplant entitlement to public funds, e.g.,
Supplemental Security Income or Medicaid.
It is further ORDERED that within thirty (30) days of the entry
of this Decree, the Defendants shall implement affirmative steps
to notify the members of the surrounding community that all
dwellings owned, managed and/or leased by the Defendants are
available without regard to sex or race. These steps shall
- Conducting all advertising for the rental of dwellings in
accordance with the provisions of the regulations promulgated by
the Department of Housing and Urban Development at 24 C.F.R. Part
109, a copy of which is appended to the Decree as Appendix B. The
Defendants shall make this a condition of all contracts
establishing an agency or employment contract for rental
management of the property located at 1241 W. Loyola, Chicago,
Illinois. Accordingly, the slogan "Equal Housing Opportunity" and
the fair housing logo will appear in all display advertising.
Such slogan, logo and statements shall be prominently placed and
- Posting in any rental office managed, leased or used by the
Defendants or their rental agents, a sign no smaller than 10
inches by 13 inches which indicates that all apartments are
available for rent on a nondiscriminatory basis. The poster shall
be in compliance with regulations promulgated by HUD and
described in 24 C.F.R. Part 110. A copy of the poster appended to
this Decree as Appendix B-1 will satisfy this requirement.
- Posting a notice of the Defendants' nondiscriminatory
policies described in Part V, below, in any rental office owned,
managed, leased or used by the Defendants or their rental agents.
Copies of this notice and the tenant selection standards and
procedures shall be made available upon request to all persons
who inquire about apartments. A notice shall also be posted in
each such office informing prospective housing applicants of the
availability of these copies.
- Informing in writing, within five (5) days of engagement,
any firm, association, company, corporation or other person
Defendants employ or otherwise engage to act as a real estate
agent, referral agency, or otherwise to manage or promote rental
of her residential properties, of Defendants' policies of
nondiscrimination and of all obligations of Defendants' and their
agents under the terms of this Decree. Such entity or entities
shall be further advised that violation of this Consent Decree
could subject it or them to termination of its agency or
employment relationship with Defendants and to possible sanctions
by the Court. The parties agree that the notice in the form set
forth in Appendix C shall satisfy Defendants' obligation under
this paragraph. The name of such entity or entities, along with a
copy of the written notification, shall be forwarded to the
United States and the Lawyers Committee within ten (10) days of
It is further ORDERED that within fifteen (15) days of the
entry of this Decree, Tim Martologo shall complete an educational
program conducted by the Lawyers Committee regarding the rental
process. Any management company employee or agent hired to manage
1241 W. Loyola shall either complete such an educational program
by the Lawyers Committee or certify under oath that he or she has
completed such training within the previous six months. (1) Each
employee whose duties include collecting rent from, servicing the
apartment units of, showing apartments to, investigating the
qualifications of, or determining whether or not to rent to
potential tenants, and each employee who supervises the work of
any such employee, shall be required to participate in this
program. This program shall include providing each employee with
a copy of this Consent Decree, and informing them of their duties
and obligations under this Decree as well as their duties and
obligations under the Fair Housing Act. Such program shall also
- Furnishing to each such agent and employee a letter in the
form set forth in Appendix D summarizing Defendants' policies of
nondiscrimination under the terms of this Decree, and informing
each such person, in person or by general meeting, of the duties
of Defendants and their agents and employees pursuant to these
policies, and what disciplinary measures might be taken in the
event of noncompliance, including possible sanctions by the
- Securing a signed statement in the form set forth in
Appendix E from each such agent and employee that: (1) he or she
has received, read and understands the statements of
nondiscrimination mentioned in section V, Part A, above; (2) he
or she has received the instructions described in Section V, Part
A, above; and (3) he or she will comply with this Decree.
- Within fifteen (15) days of the commencement of an agency or
employment relationship with Defendants, each new agent and
employee of Defendants shall be provided with the information set
forth above in Section V, Part A, and be required to sign the
statement described in Section V, Part B, above.
- NONDISCRIMINATORY STANDARDS AND PROCEDURES
It is further ORDERED that:
- The Defendants shall, upon entry of this Decree, and
throughout its term, relinquish responsibility for daily rental
management of the property located at 1241 W. Loyola, Chicago,
Illinois. The agent, entity or person, who will assume
responsibility for daily rental management of said property shall
apply objective, uniform, racially and sexually nondiscriminatory
standards and shall follow a uniform procedure for: 1) the
processing of applications, 2) the establishment of waiting
lists, and 3) the approval of prospective tenants for positions
on waiting lists and/or for occupancy of available apartments.
The race and sex-neutral standards and procedures for the rental
of properties during the term of this Decree shall consist of
those set forth in Appendix F hereto, except as subsequently
modified according to the following procedures.
- Notice of any proposed modifications shall be provided to
the United States and the Lawyers' Committee no later than thirty
(30) days prior to implementation. Unless the United States or
the Lawyers' Coiimittee objects, the modifications will be
effective at the end of the thirty (30) day period. If the United
States or the Lawyers Committee objects, the modifications shall
not be implemented. The parties shall attempt to resolve any
dispute within thirty days of notice by the United States or the
Lawyers' Committee that it objects to any such change. Upon
expiration of the thirty day period either party may present the
issue to the Court for resolution.
- The Defendants and their rental agent shall inform each individual who inquires about the availability of apartments or other dwellings of all vacancies that are immediately available
and those that they reasonably believe will be available within
the following ninety days. If no vacancy is so available, then
the Defendants and their rental agents shall inform the person
making inquiry of the availability of a waiting list, if any. If
the individual making inquiry about an apartment or other
dwelling wishes to make an application and/or be placed on any
waiting list that is used for the properties owned, managed
and/or leased by the Defendants, he/she shall immediately be
afforded such opportunity.
- The Defendants and their rental agent shall inform the Lawyers' Committee of each apartment vacancy at 1241 W. Loyola, Chicago, Illinois, within 5 business days of the date upon which the apartment is vacated or notice is received of an intention to vacate, whichever is earlier.
It is further ORDERED that Defendants shall maintain the
following records for each of the buildings and other properties
that they own, manage and/or lease for the duration of this
- A log similar to that attached as Appendix G containing the
following information about each person inquiring in person at
any office of the Defendants or their rental agents about the
availability or rental of a dwelling during the previous
- The name, current address, telephone number, race or national
origin (white, black, other), and sex;
- Date of visit, time arrived and left;
- How the person learned of the property (advertisement,
- Whether the person was shown an apartment, if so, the
apartment numbers; (if not, why not);
- Name of the agent who gave the tour;
- Whether the person filled out an application and the
date of the application;
- Whether the person rented an apartment or other dwelling and,
if so, the date of the lease, and the amount of security deposit;
- If the person was rejected, the reason for such rejection;
- Whether the person was placed on a waiting list.
- All application forms completed by prospective or actual
tenants for apartments or other dwellings owned, managed or
leased by the Defendants, and all other documents relating to the
application process, including correspondence, notes of credit or
other reference checks and receipts.
- All vacancy lists, if utilized, and all waiting lists.
- Copies of all brochures used and advertisements placed by
the Defendants, including the dates and media in which they were
published or distributed.
- Copies of statements of employees in which they acknowledge
that they understand their obligations under this order, as
required by Section V, Part B of this Order (Appendix E).
It is further ORDERED that the United States and the Lawyers'
Committee shall have the right to inspect and copy the records
described above upon providing reasonable notice to Defendants.
The United States and the Lawyers' Committee shall attempt to
minimize any inconvenience to the Defendants during the
inspection and copying of such records.
It is further ORDERED that four months after entry of this Order,
and every four (4) months thereafter for a period of four (4)
years, Defendants shall serve on the United States a report
containing the following: (3)
- Copies of all parts of the log being maintained pursuant to
Section VII, Part B, above, for the period covered by the report;
- The number of advertisements published, the dates when such
advertisements were published and the newspaper or other media in
which such advertisements were published. If Defendants wish to
submit copies of all advertisements placed during the reporting
period in lieu of the above, such a submission will be an
- Photographs of all notices and signs posted pursuant to
Section IV of the Decree; if the notices and signs have not
changed during the reporting period, additional photographs need
not be submitted;
- Copies of all letters and signed statements prepared or
secured pursuant to Section V; and
- For all activities related to the rental of apartments or
other dwellings that are conducted by outside agencies for the
Defendants during the previous reporting period, the name,
address and description of duties of each entity, if any, engaged
by Defendant to conduct such activities, and copies of any
contracts with or instructions to such entities.
It is further ORDERED that Defendants, during the term of this
Decree, shall report to the United States and the Lawyers'
committee in writing within thirty (30) days of receipt any
complaint of sexual harassment or race discrimination which comes
to the attention of Defendants at any property owned, managed or
leased by the Defendants. Such report shall include full details
of the complaint and any action taken or proposed by Defendants
It is further ORDERED that the Defendants shall notify the United
States and the Lawyers' Committee of Defendants' intention to
sell or otherwise dispose of its interest in any property owned,
managed or leased by the Defendants. Such notification shall be
made at least thirty days prior to the sale or transfer of
interest and shall include the identity of the potential
purchaser(s) or person(s) to whom the interest is being
This Decree shall remain in effect for a period of four years
from the date of its entry and the Court shall retain
jurisdiction of this action for all purposes relating to the
enforcement of this Decree.
Ordered this _________ day of ________________, 1994.
UNITED STATES DISTRICT JUDGE
The undersigned apply for and consent to the entry of this
For the United States:
DEVAL L. PATARICK
Assistant Attorney General
PAUL F. HANCOCK
ISABELLE M. THABAULT
PATRICK J. MARKEY
Housing and Civil Enforcement Section
Civil Rights Division
United States Department of Justice
P.O. BOX 65998
Washington, D.C. 20035-5998
For the Private Plaintiffs:
Lawyers' Committee for Fair Housing, Inc.
1263 Loyola Ave.
Chicago, Ill. 60626
For Defendant Gheorghi Nedialkov:
2622 West Windsor
Chicago, Ill 60602
James S. Jendrky
Querrey & Harrow, Ltd.
2 Prudential Plaza
180 N. Stetson Avenue, Suite 3500
Chicago, Ill. 60601
(312) 540-7000 or 7518
For Defendant James Nedialkov:
2622 West Windsor
Chicago, Ill. 60602
1. It is understood that, as a specific term in the contract
establishing the agency or employment relationship, any employees
or agents of the business entity engaged to provide rental agents
or representatives to the Defendant will be included under the
definition of "employee" as used in this section.
2. It is further agreed that any business entity engaged by
the Defendant will also be responsible for carrying out the
provisions of this section, and such responsibility will be noted
in a specific provision of the contract establishing the agency
or employment relationship.
3. If there has been no activity under a particular reporting
provision during the pertinent reporting period, a negative
report should nevertheless be submitted. In the event of a
reporting or notice violation, the United States or the Lawyers
Committee will provide notice to Defendants and their counsel of
such failure, to which Defendants shall respond within seven (7)
Document Filed: December 1, 1994