CONSENT DECREE

UNDER

THE AMERICANS WITH DISABILITIES ACT

BETWEEN

THE UNITED STATES OF AMERICA

AND

DAYS INNS OF AMERICA, INC. and CENDANT CORPORATION

re:

new construction under the ADA

 

 

 

 

Consent Decree | Department of Justice Press Releases

 

 

 

Consent Decree

 

 

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF KENTUCKY
PIKEVILLE DIVISION

 

 

UNITED STATES OF AMERICA,

Plaintiff,

v.

Case No.: 96-26


DAYS INNS OF AMERICA, INC.,
and CENDANT CORPORATION,

Defendants.

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CONSENT ORDER AND FINAL JUDGMENT

JURISDICTION

A. The Court has jurisdiction of this matter pursuant to 28 U.S.C. §§ 1331 and 1345 and 42 U.S.C. § 12188(b).

B. Pursuant to 42 U.S.C. § 12181 (7) (A) and 28 C.F.R. § 36.104, inns, hotels, motels, or other places of lodging are places of public accommodation. Thus, Places of Lodging, as defined in this Consent Order, are places of public accommodation within the meaning of 42 U.S.C. § 12181(7) (A) and 28 C.F.R. § 36.104. Places of Lodging are also commercial facilities within the meaning of 42 U.S.C. § 12181(a) (2) and 28 C.F.R. § 36.104.

CONTENTIONS OF THE PARTIES

A. The United States contends that Days Inns of America, Inc. ("DIA") and Cendant Corporation ("Cendant") are public accommodations within the meaning of 42 U.S.C. § 12181 (a) (2) and 28 C.F.R. § 36.201(a). DIA and Cendant deny this contention.

B. DIA and Cendant contend that neither of them is "an inn, hotel, motel, or other place of lodging" and, therefore, neither meets the definition of "public accommodation" under the ADA. The United States denies this contention.

C. The United States contends that DIA and Cendant operate the Places of Lodging in the Days Inn® System for purposes of 42 U.S.C. § 12182. DIA and Cendant deny this contention.

D. DIA and Cendant contend that Places of Lodging in the Days Inn System are operated by the owners of those Places of Lodging and not by either DIA or Cendant. The United States denies that DIA and Cendant do not operate those Places of Lodging along with the owners of those Places of Lodging.

E. The United States contends that DIA and Cendant failed to design and construct certain facilities (i.e., certain Places of Lodging) for first occupancy after January 26, 1993, to be readily accessible to and usable by individuals with disabilities, in violation of 42 U.S.C. § 12183 (a) (1) of the ADA. DIA and Cendant deny this contention.

F. DIA and Cendant contend that liability under 42 U.S.C. § 12183 (a) (1) is limited to any entity that owns, leases (or leases to), or operates a place of public accommodation or a commercial facility. DIA and Cendant further contend that facilities in the Days Inn System are designed and constructed solely by the owner or operator and by the architect and contractor retained by the owner or operator. The United States denies these contentions.

G. Because DIA and Cendant contend that they are not parties who may be held liable under either 42 U.S.C § 12182 or 42 U.S.C. § 12183 for violations of the Americans with Disabilities Act at licensed lodging facilities, they further contend that 42 U.S.C. § 12188(b)(2)(C)(ii) does not provide an appropriate remedy in the event of a violation of this Consent Order. The United States denies these contentions.

BACKGROUND

A. The United States Department of Justice (the "Department") is the federal agency responsible for administering and enforcing Title III of the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12181 - 12189.

B. Pursuant to Title III of the ADA, all places of public accommodation and commercial facilities designed and constructed for first occupancy after January 26, 1993, must be readily accessible to and usable by individuals with disabilities.

C. Places of public accommodation and commercial facilities designed and constructed for first occupancy after January 26, 1993, are not readily accessible to and usable by individuals with disabilities for purposes of Title III of the ADA unless they comply with the requirements set forth in the ADA Standards for Accessible Design, 28 C.F.R. pt. 36, Appendix A (the "ADA Standards").

D. In 1994 and 1995, pursuant to the Attorney General's authority under 42 U.S.C. § 12188(b)(1)(A)(i) to conduct compliance reviews of covered entities, the Department conducted compliance reviews of 30 places of lodging believed by the Department to have been designed and constructed for first occupancy after January 26, 1993, that were operating under the Days Inn System pursuant to license agreements with DIA and using registered marks owned by TM Acquisition, which marks DIA has the exclusive right to sublicense. The Places of Lodging surveyed were located in Brewton, Alabama; Butte, Montana; Camden, Alabama; Champaign, Illinois; Richland, Mississippi; Conway, Arkansas; Dumas, Arkansas; Elberton, Georgia; Eureka, California; Evansville, Indiana; Fort Stockton, Texas; Hazard, Kentucky; Hendersonville, North Carolina; Hernando, Mississippi; Johnson Creek, Wisconsin; Lolo, Montana; Memphis, Tennessee; Monticello, Arkansas; Morton, Illinois; New Braunfels, Texas; Richland, Mississippi; Seattle, Washington; Sturgis, South Dakota; Terrell, Texas; Toledo, Iowa; Wall, South Dakota; Waterloo, Iowa; Watertown, South Dakota; Willows, California; and York, South Carolina. The purpose of the compliance reviews was to determine the extent to which these Places of Lodging complied with the requirements of the ADA Standards.

E. Between 1993 and 1997, the Licensees of the Places of Lodging in Elberton, Georgia; Eureka, California; Fort Stockton, Texas; and Johnson Creek, Wisconsin voluntarily entered into settlement agreements or consent decrees with the United States, thereby committing to bring their Places of Lodging into compliance with the ADA Standards. The United States asserts that the Licensees of the Places of Lodging in Willows, California; Wall, South Dakota; Champaign, Illinois; Hazard, Kentucky; and Evansville, Indiana did not agree to enter into settlement agreements or consent decrees with the United States until after the United States filed lawsuits against them.

F. After negotiations with DIA and DIA's parent corporation at that time, HFS Incorporated ("HFS"), seeking to resolve the Department's investigation against DIA and HFS without resorting to litigation failed, the Department filed five lawsuits against DIA, HFS, and the Licensees, architects, and contractors of five individual Places of Lodging to enforce compliance with the requirements of Title III of the ADA. The lawsuits were filed in United States District Court in the following jurisdictions: the Eastern District of California, the District of South Dakota, the Central District of Illinois, the Eastern District of Kentucky, and the Southern District of Indiana. In these lawsuits, the Department alleged that DIA and HFS had violated Title III of the ADA by failing to design and construct Places of Lodging to be readily accessible to and usable by individuals with disabilities.

G. HFS merged with CUC International, Inc. on December 17, 1997, and was renamed Cendant Corporation. As a result, Cendant is a successor by merger to HFS. Neither Cendant nor HFS is a party to any license agreement or franchise agreement.

H. On October 29, 1997, the United States District Court for the District of South Dakota entered summary judgment in favor of DIA and HFS. The Department appealed that ruling to the United States Court of Appeals for the Eighth Circuit, which issued a ruling on August 6, 1998, reversing in part and affirming in part the district court's decision and remanding the case for further proceedings. On November 4, 1998, DIA and Cendant filed a petition for certiorari with the Supreme Court of the United States, which the Supreme Court denied on March 22, 1999.

I. On January 12, 1998, the United States District Court for the Eastern District of California granted DIA's and HFS's motion for summary judgment, dismissing the Department's claims. The Department appealed that ruling to the United States Court of Appeals for the Ninth Circuit. The Court of Appeals did not schedule the appeal for oral argument based on representations by the Parties that they believed the appeal would be resolved pursuant to a negotiated consent order and final judgment.

J. On March 16, 1998, the United States District Court for the Central District of Illinois granted the Department's motion for summary judgment in part. Trial on the remedies phase of the case was scheduled for March 15, 1999. On February 8, 1999, the Court continued the trial date upon representations by the Parties that they believed the litigation would be resolved by a negotiated consent order and final judgment.

K. On September 30, 1998, the United States District Court for the Eastern District of Kentucky granted DIA's and HFS's motion for summary judgment, dismissing the Department's claims. The Department appealed that ruling to the United States Court of Appeals for the Sixth Circuit. In a status conference, the Parties requested the Court of Appeals to remand the case to the district court for entry of a negotiated consent order and final judgment which would resolve the litigation.

L. DIA, Cendant, and the Department (collectively, the "Parties") have reached agreement that it is in the Parties' best interests, and the Department believes it is in the public interest, to fully and finally resolve these lawsuits on mutually-agreeable terms without further litigation and have, therefore, agreed to the entry of this Consent Order and Final Judgment.

M. The Parties have entered into this Consent Order and Final Judgment for the purposes of compromising disputed claims, which claims DIA and Cendant have denied and continue to deny. This Consent Order and Final Judgment is not intended to be, and shall not be deemed to be, an admission of any liability on the part of DIA and/or Cendant.

WHEREFORE, the Parties hereby agree and stipulate to the Court's entry of this Consent Order and Final Judgment, which provides as follows:

DEFINITIONS

1. Definitions. The Parties agree and stipulate that certain terms shall be defined for purposes of this Consent Order:

"ADA Standards" shall mean and refer to the standards set forth at 28 C.F.R. pt. 36, Appendix A.

"Cendant" shall mean and refer to Cendant Corporation and HFS Incorporated and any parents, assignees, and/or successors-in-interest of Cendant Corporation or HFS Incorporated.

"Certification of ADA Compliance" shall mean and refer to a form that was developed by the Department and provided to DIA on or before the date this Order is executed by DIA that will serve as the means by which DIA ensures that, prior to permitting a Future Place of Lodging to open for business using any of the Days Marks or the Days Inn System, it receives a certification that the Future Place of Lodging complies with the ADA Standards.

"Certification Program" shall mean and refer to the certification program described in Section 2 of the Consent Order.

"Consent Order" shall mean and refer to this Consent Order and Final Judgment.

"Days Inn System" shall mean and refer to a system for which DIA licenses the use of certain service marks, trade names, logos, and trade dress; and provides its licensees franchise services, marketing programs, a quality assurance program, and access to a national reservation system, all of which are described in the current Uniform Franchise Offering Circular.

"Days Marks" shall mean and refer to any of the various trade names, service marks, logos, and trade dress, and derivatives thereof that DIA or any successor-in-interest to DIA has the right to sublicense at any time during the Term of this Consent Order.

"Department" shall mean and refer to the United States Department of Justice and, because the Department has designated enforcement authority for Title III of the ADA, "Department" is used interchangeably with "United States."

"DIA" shall mean and refer to Days Inns of America, Inc., and its subsidiaries, assignees, and/or successors-in-interest; as well as any other entity that is an authorized licensor of any trade names, service marks, logos, and trade dress that are or were owned by DIA at any time during the Term of this Consent Order.

"Effective Date" shall mean and refer to the date this Consent Order is entered as a final judgment by the United States District Court for the Eastern District of Kentucky.

"Election to Participate" shall mean and refer to a Licensee sending written notice of any kind to DIA indicating a willingness to participate in either the Survey Program or the Loan Program.

"Existing New Construction Places of Lodging" shall mean and refer to all Places of Lodging designed and constructed for first occupancy after January 26, 1993, for which a License Agreement has been executed prior to the Effective Date of this Consent Order and either (1) a building permit has been issued by the State, county or local government before the Effective Date of this Consent Order, or (2) the Place of Lodging has opened for business. Existing New Construction Places of Lodging expressly excludes any facility that has operated other than pursuant to a License Agreement with DIA at any time prior to the Effective Date of this Consent Order.

"Funds Availability Period" shall mean and refer to the time period beginning on the Effective Date of this Order and continuing until five (5) years after the date upon which the Surveyor(s) provides DIA with a Survey Report on the last Existing New Construction Place of Lodging surveyed in the Survey Program.

"Future Place of Lodging" shall mean and refer to any Place of Lodging that: (a) is designed and constructed for first occupancy after January 26, 1993, (b) is authorized by DIA to open for business using one or more of the Days Marks or using the Days Inn System at any time after the Effective Date of this Consent Order, and (c) does not meet the definition of Existing New Construction Places of Lodging.

"HFS" shall mean and refer to HFS Incorporated and its parents, subsidiaries (other than DIA), assignees, or successors-in-interest, including Cendant.

"Invitation to Participate in the Loan Program" shall mean and refer to a letter, previously prepared by DIA and reviewed by the Department, that will be sent to certain Licensees inviting them to participate in the Loan Program.

"Invitation to Participate in the Survey Program" shall mean and refer to a letter, previously prepared by DIA and reviewed by the Department, that will be sent to certain Licensees inviting them to participate in the Survey Program.

"License Agreement" shall mean and refer to any agreement between an owner of a Place of Lodging and DIA that authorizes the owner of the Place of Lodging to use any of the Days Marks or the Days Inn System.

"Licensee" shall mean and refer to any persons and entities that have entered into a License Agreement with DIA with respect to a Place of Lodging that has used, uses, or intends to use any of the Days Marks and/or the Days Inn System.

"List of Approved Contractors" shall mean and refer to a list of contractors prepared by DIA showing all contractors who are approved by DIA to perform Remediations at Existing New Construction Places of Lodging.

"Party" shall mean and refer to DIA or Cendant or the Department.

"Parties" shall mean and refer to DIA, Cendant, and the Department, collectively.

"Pending Litigation" shall mean and refer to the lawsuits filed by the Department against DIA and HFS under Title III of the ADA in United States District Court in the Eastern District of California, the District of South Dakota, the Central District of Illinois, the Southern District of Indiana, and the Eastern District of Kentucky, including any appeals or petitions for certiorari filed in such actions, but shall exclude the claims against the Licensees, architects, and contractors that were filed in such actions.

"Place of Lodging" shall mean and refer to a hotel, motel, inn, place of lodging, or guest lodging facility designed and constructed for first occupancy after January 26, 1993, that is making authorized use of, or plans to make authorized use of, one or more of the Days Marks or the Days Inn System pursuant to an agreement or understanding with DIA.

"Previously Surveyed Place of Lodging" shall mean and refer to a Place of Lodging that was surveyed for compliance with the ADA Standards (a) by the Department, (b) by a consultant(s) retained by the Department, or (c) by the consultant(s) retained by the Parties to survey certain Places of Lodging during the negotiations relating to this Consent Order.

"Remediation Fund" shall mean and refer to $4.75 million that DIA and Cendant shall make available on a revolving basis to Licensees of Existing New Construction Places of Lodging to finance Remediations pursuant to the terms of Section 15 of this Consent Order.

"Remediations" shall mean and refer to all architectural and other changes that must be made to the building and grounds of an Existing New Construction Place of Lodging in order to bring that Existing New Construction Place of Lodging into compliance with the requirements of the ADA Standards.

"Survey Report" shall mean and refer to a report that separately identifies each of the violations of the ADA Standards at an Existing New Construction Place of Lodging or a Previously Surveyed Place of Lodging and each of the Remediations, if any, required to bring the Place of Lodging into compliance with the ADA Standards.

"Surveyor" shall mean and refer to the person(s) or entity(ies) paid by DIA to perform a survey of an Existing New Construction Place of Lodging pursuant to Section 7 of this Consent Order.

"Term" shall mean and refer to the term of this Consent Order as set forth in Section 46 of this Consent Order.

CERTIFICATION PROGRAM


2. Establishment of Certification Program. A Certification Program shall be established pursuant to the following terms that is intended to ensure that DIA receives Certifications of ADA Compliance for all Future Places of Lodging before they are authorized by DIA to begin operations using any of the Days Marks or the Days Inn System.

a. Within ten (10) days after the Effective Date, DIA will require a Certification of ADA Compliance to be submitted to DIA by the Licensee for each Future Place of Lodging before DIA authorizes such Future Place of Lodging to begin operations using any of the Days Marks or the Days Inn System.

b. Before authorizing a Future Place of Lodging to begin operations using any of the Days Marks or the Days Inn System, DIA shall review the Certification of ADA Compliance submitted for each such Place of Lodging to determine that the form has been properly completed. DIA's determination that a Certification of ADA Compliance has been properly completed shall not constitute a determination by any of the Parties that the Future Place of Lodging complies with the ADA Standards, nor shall it constitute a determination that any information on the Certification of ADA Compliance is accurate or valid.

c. DIA may determine that a Certification of ADA Compliance has been properly completed when the following conditions are met: (1) the form appears to have been completed substantially in accordance with instructions and (2) the form purports to bear the signatures of persons identified on the form as the architect of record, the building contractor, or a consulting architect for the Future Place of Lodging certifying compliance with ADA Standards. In instances where a Licensee cannot obtain the completed Certification of ADA Compliance from the architect of record, the building contractor or a consulting architect, the Licensee may complete and sign the Certification of ADA Compliance itself, and DIA may consider that the Certification of ADA Compliance has been properly completed so long as the following conditions are met: (1) the Licensee represents to DIA that it attempted to have the Certification of ADA Compliance completed by the architect of record, the building contractor, and a consulting architect but they refused to complete the form; (2) the Licensee represents to DIA that it has no reason to believe that the architect of record's, the building contractor's, and any consulting architect's refusal to complete the Certification of ADA Compliance was based on a belief that the Place of Lodging does not comply with the requirements of the ADA Standards; (3) the form appears to have been completed substantially in accordance with instructions; and (4) the form bears the Licensee's signature certifying compliance with ADA Standards.

d. If DIA determines that a Certification of ADA Compliance has not been properly completed, or if personnel at DIA responsible for administration of the certification program have actual knowledge (not constructive or implied knowledge) that signatures contained on the form are false or fraudulent, DIA shall return the form to the Licensee with written notice that DIA will not permit the Future Place of Lodging to open for business as a part of the Days Inn System until it has received a properly completed Certification of ADA Compliance. DIA and/or Cendant shall have no responsibility or liability arising as a result of the inaccuracy of any information or certification provided by any Licensee as part of the Certification Program.

e. DIA shall retain each completed Certification of ADA Compliance throughout the Term of this Consent Order or for a period of five (5) years following the date on which the Future Place of Lodging opened for business using any of the Days Marks or the Days Inn System, whichever is longer.

SURVEY PROGRAM

3. Preparation of Survey Reports for Previously Surveyed Places of Lodging. The Department and its consultant(s) shall prepare a Survey Report for each Previously Surveyed Place of Lodging surveyed by the Department or its consultant(s). DIA shall obtain a Survey Report from John D. Barr of ASI for each Previously Surveyed Place of Lodging that ASI surveyed. All Survey Reports of Previously Surveyed Places of Lodging shall be provided to DIA within thirty (30) days after the Effective Date.

4. Invitation to Participate in the Survey Program. Within ten (10) days after the Effective Date, DIA shall send by Certified Mail, Return Receipt Requested, Postage Prepaid, an Invitation to Participate in the Survey Program together with an enclosure prepared by the Department to all Licensees of Existing New Construction Places of Lodging except Licensees of Previously Surveyed Places of Lodging.

5. Election to Participate in the Survey Program. Licensees of Existing New Construction Places of Lodging (except for Licensees of Previously Surveyed Places of Lodging) shall have sixty (60) days from the date of receipt of the Invitation to Participate in the Survey Program to make an Election to Participate in the Survey Program. Seventy-five (75) days after DIA's mailing of the Invitation to Participate in the Survey Program to Licensees, DIA shall report to the Department the identity of Licensees who have elected to participate in the Survey Program and the location of the Places of Lodging to be surveyed. For a period of at least seventy-five (75) days after DIA's mailing of the Invitation to Participate in the Survey Program, the Department shall not take any action, or threaten to take any action, against any Licensee with respect to enforcement of the ADA.

6. Development of Survey Instrument. Within ninety (90) days after the Effective Date of this Consent Order, the Department shall develop an instrument (including a form and instructions) to be used by the Surveyor(s) to conduct surveys of all Existing New Construction Places of Lodging to determine if they comply with the ADA Standards. The survey instrument shall be structured in a way that provides for the properly completed form to (1) identify all violations of the ADA Standards at an Existing New Construction Place of Lodging, and (2) specify the Remediations required to correct the violations of the ADA Standards at the Existing New Construction Place of Lodging. When more than one Remediation would be an appropriate alternative to correct a violation of the ADA Standards, the survey instrument shall provide for the Surveyor(s) to identify alternative Remediations. The Department shall have the right to modify the survey instrument if the Department determines that such modification is necessary to ensure the consistency of surveys. DIA may propose suggestions for form, design, and content and will be given the opportunity to review a draft of the survey instrument or any modifications of the survey instrument, and the Department will consider any suggestions or comments made by DIA provided that such suggestions or comments are provided to the Department in a timely manner.

7. Selection of Surveyor(s) to Perform Surveys of Existing New Construction Places of Lodging. Within ninety (90) days after the Effective Date of this Consent Order, the Department and DIA shall agree upon one or more Surveyors to perform surveys of all Existing New Construction Places of Lodging that elect to participate in the Survey Program. The Department and/or its consultant(s) shall provide training to the Surveyor(s) so that surveys are conducted in a reliable, consistent manner. Upon request, the Department and/or its consultant(s) shall also be available to answer questions from the Surveyor(s) relating to the proper interpretation of the ADA Standards and options for Remediations needed to bring a facility into compliance with the ADA Standards.

8. Selection of Other or Additional Surveyor(s). From time to time, with approval of the Department, DIA may select and retain other or additional Surveyors to perform surveys as part of the Survey Program.

9. DIA's Role in Survey Program. Except for the development of the survey instrument and the training and consultation provided by the Department or its consultant(s), DIA shall be responsible for the cost of the Survey Program. The Surveyor(s) shall work independently and DIA shall not guarantee, or be otherwise responsible or liable for, the quality of the surveys or Survey Reports.

10. Contact Person to Answer Licensees' Questions About the Survey Program. DIA will designate one or more contact persons knowledgeable about the Survey Program who shall be available to Licensees by telephone to answer Licensees' questions about the mechanics of the Survey Program.

11. Performance of Surveys. Within twelve months (365 days) after receipt by the Department of the notice from DIA of all Licensees who have elected to participate in the Survey Program, the Surveyor(s) shall complete a survey of, and complete and deliver to DIA a Survey Report for, each Existing New Construction Place of Lodging that has elected to participate in the Survey Program. Each Survey Report shall (1) identify all violations of the ADA Standards at an Existing New Construction Place of Lodging, and (2) specify the Remediations required to correct the violations of the ADA Standards at the Existing New Construction Place of Lodging, including a list of alternative means of performing Remediations when alternative means are appropriate. The Surveyor(s) shall not provide a copy of the Survey Report, nor otherwise communicate the contents of the Survey Report, to the Department.

12. No Fees for Participation in Survey Program. Licensees' participation in the Survey Program shall be free of charge. DIA, Cendant, the Department, the Surveyor(s), and the Department's consultant(s) shall not charge any Licensee any fees for participation in the Survey Program.

13. Survey Reports Not Admissible In Civil Enforcement Actions by the Department Under Title III of the ADA. The Department shall not use any Survey Report prepared as part of the Survey Program as the basis for instituting, or as evidence in, a civil enforcement action against any Licensee. This provision of the Consent Order shall not be construed to prevent the Department from filing a civil enforcement action against a Licensee under Title III of the ADA in United States District Court if the Licensee fails to make any or all of the Remediations or from conducting an additional survey of an Existing New Construction Place of Lodging's compliance with the requirements of the ADA Standards.

 

LOAN PROGRAM

14. Providing Licensees with Survey Reports and Inviting Licensees to Participate in the Loan Program. Within thirty (30) days following DIA's receipt of each Survey Report from the Surveyor, the Department or the Department's contractor(s) or consultant(s), DIA shall send to the Licensee of the surveyed Existing New Construction Place of Lodging or the Licensee of the Previously Surveyed Place of Lodging by Certified Mail, Return Receipt Requested, Postage Prepaid: (1) the Survey Report, (2) an Invitation to Participate in the Loan Program, which explains the terms of the Loan Program, and (3) an explanation of payment provisions for contractors that Licensees can provide to contractors when soliciting bids for the performance of Remediations.

15. Obligation to Make Loan Funds Available for Remediations. DIA and Cendant shall make $4.75 million available for use in a "revolving" Remediation Fund that will provide interest-free financing of Remediations for any eligible Licensee that elects to participate in the Loan Program. By designating the Remediation Fund as a "revolving" fund, this Consent Order requires that, during any time period that this Consent Order requires DIA to make loans to eligible Licensees under the Loan Program, any monies received by DIA to repay loans received from the Loan Program shall be returned to the Remediation Fund and shall be available to finance other loans under the Loan Program. DIA and Cendant's obligation to make funds available under the Loan Program shall be limited to the initial $4.75 million and any amounts repaid under the Loan Program. DIA and Cendant shall have no obligation to furnish funds to replace amounts borrowed but not repaid by any Licensee. The Loan Program shall comply with the following requirements:

a. The $4.75 million in funds that DIA and Cendant make available for use in the Remediation Fund shall be used solely to finance the actual cost of Remediations and certain architectural drawings and specifications relating to those Remediations and shall not be used to cover DIA's costs of administering the Survey Program or the Loan Program, or otherwise to finance compliance with the terms of this Consent Order;

b. The Remediation Fund shall be available to lend funds to any Licensee of an Existing New Construction Place of Lodging who makes an Election to Participate in the Loan Program in accordance with the procedures set forth in Section 17 of this Consent Order with no requirement for the Licensee to prove or assert financial need;

c. The amount of funds lent from the Remediation Fund to any individual Licensee shall not be capped except that it shall not exceed the total of the actual costs of Remediations at the Licensee's Existing New Construction Place of Lodging(s) and the Licensee's actual costs of obtaining architectural drawings and specifications used as the basis for obtaining estimates from contractors to perform Remediations;

d. The period of time that a Licensee shall have to repay funds received from the Remediation Fund shall be three (3) years, with repayments to be made on a monthly basis in equal installments until the principal is repaid, although, at the Licensee's option, the repayment period may be shorter than three (3) years. A Licensee's obligation to repay funds received from the Remediation Fund shall begin thirty (30) days after the date on which DIA first makes payment for any Remediations to the architect serving as construction manager for the Remediations. DIA shall have the right to accelerate repayment by the Licensee if the Licensee's License Agreement to operate in the Days Inn System is terminated consistent with the License Agreement and applicable law for failure to pay any monetary obligation to DIA when due;

e. DIA and Cendant shall not be required to lend monies from the Remediation Fund to any Licensee whose License Agreement is scheduled to expire before the standard three-year repayment period will have run except that DIA shall give the Licensee the option of extending the License Agreement for a period of five (5) years as a condition to receiving a loan from the Remediation Fund;

f. DIA and Cendant shall not be required to lend monies from the Remediation Fund to any Licensee whose License Agreement may be terminated at the option of the Licensee before the three-year repayment period will have run except that DIA shall give such Licensee the option of deferring or postponing its option to terminate the License Agreement, provided that the Licensee may not be required to defer or postpone the option to terminate for a period longer than five (5) years as a condition to receiving a loan from the Remediation Fund;

g. Licensees shall receive loans from the Remediation Fund without any obligation to pay interest on the funds;

h. No fees or costs of the Remediation Fund or the Loan Program shall be charged to Licensees;

i. During the Funds Availability Period, all funds that Licensees repay to DIA under the Loan Program shall be available in the Remediation Fund to finance Remediations for other Licensees;

j. In instances where a Licensee has demonstrated to DIA the financial inability to repay funds received from the Remediation Fund, DIA may waive all or part of repayment. DIA may waive all or part of repayment of a loan for reasons unrelated to financial inability to repay as long as DIA replenishes the Remediation Fund in the amount of funds so waived;

k. DIA and Cendant shall receive no profits or financial benefits from the Loan Program other than the financial benefits that DIA and Cendant will derive from ensuring that Existing New Construction Places of Lodging and Future Places of Lodging are readily accessible to and usable by individuals with disabilities and the good will arising therefrom, except that DIA and/or Cendant may receive a commission as a result of a Licensee's use of a contractor from the List of Approved Contractors;

l. DIA shall require a Licensee to execute a loan agreement and promissory note as a condition of participation in the Loan Program but shall not require a Licensee to pledge collateral as a condition for receiving a loan from the Loan Program. The loan agreement and promissory note that DIA will use were prepared by DIA and reviewed by the Department before execution of this Consent Order. The Licensee shall not be required to prove creditworthiness as a condition of receiving a loan unless the amount of the loan will exceed $3,000 per guest room at the Existing New Construction Place of Lodging where Remediations are to be performed. Notwithstanding the foregoing, DIA is not obligated to permit participation in the Loan Program by any Licensee who is more than ninety (90) days in arrears in making payments due under a Licensee Agreement except that an otherwise eligible Licensee who cures any such arrearages shall be permitted to participate in the Loan Program; and

m. The Loan Program shall reimburse Licensees for any costs incurred in obtaining architectural plans and specifications for use in obtaining the estimates required to participate in the Loan Program up to a maximum of fifteen (15) percent of the lowest bid(s) for performing the Remediation.


16. Establishment of List of Approved Contractors. DIA shall establish a List of Approved Contractors. Except as specifically authorized by this Consent Order, DIA and Cendant may receive no fee or payment of any kind from a contractor in exchange for being placed on the List of Approved Contractors.

17. Election to Participate in the Loan Program. A Licensee may make an Election to Participate in the Loan Program within sixty (60) days after receipt of the Survey Report. An Election to Participate in the Loan Program is made when a Licensee provides written notice to DIA that the Licensee may be interested in participating in the Loan Program.

18. Licensee's Right to Opt Out of the Loan Program. At any time following its Election to Participate in the Loan Program but prior to the date when the Licensee executes a loan agreement and promissory note for the use of funds from the Loan Program, a Licensee has the right to opt out of the Loan Program, except that a Licensee who opts out of the Loan Program shall not receive payment from the Loan Program for any costs incurred in obtaining architectural drawings and specifications intended to serve as the basis for contractors' estimates to perform Remediations.

19. Participation in the Loan Program. A Licensee participates in the Loan Program by submitting to DIA three (3) written independent estimates from licensed and insured building contractors for completion of all Remediations identified on the Survey Report that are not simple maintenance items (e.g., relocating a sign, relocating a coat hook, providing a clipboard for use by disabled patrons when a counter is too high to be accessible) that will be performed by the Licensee itself. One of the three independent estimates must be obtained from one or more contractor(s) appearing on the List of Approved Contractors provided to the Licensee by DIA. A Licensee that is a licensed and insured building contractor may submit an estimate to perform all or part of the Remediations itself. All estimates submitted shall include any architectural plans or specifications prepared by a registered and insured architect for contractors' use in submitting estimates. A Licensee shall have one hundred eighty (180) days following submission of the Election to Participation in Loan Program to submit the required estimates. DIA may, at its option, waive the requirement for three independent estimates if the Licensee elects to use one or more contractors from DIA's List of Approved Contractors to perform the Remediations. If a Licensee is unable to submit the required estimates within the time frame required by this Section, DIA may, for good cause determined in DIA's sole discretion, extend the time for submitting such estimates by ninety (90) days.

20. Completion of Remediations. Licensees shall be advised that they may elect to have Remediations performed by one or more contractors of their own choice but that all Remediations must be performed; the Remediations must be performed in a manner that complies with the ADA Standards; a licensed, insured architect must certify completion of all Remediations before final payment for Remediations will be made except where the Licensee is doing simple maintenance items; and DIA shall make payments for Remediations directly to the architect serving as construction manager for the Remediations and Licensees who do not opt out of the Loan Program shall be paid directly for any costs actually incurred in obtaining architectural drawings and specifications used as the basis for the estimates required for participation in the Loan Program, subject to the limitations set forth in Section 23. If funds are available, the Licensee shall have one (1) year following its submission of estimates to schedule Remediations and have Remediations completed, with an extension of time of up to six (6) additional months for completion of Remediations to be granted by DIA for good cause (e.g., delays caused by severe weather conditions or the need to schedule Remediations to avoid undue loss of business during a peak season), to be determined by DIA in its sole discretion.

21. Loan Commitment. DIA shall commit to make a loan in the amount of the estimate(s) provided by the contractor(s) selected by the Licensee to perform the Remediations if and only if there are sufficient funds available in the Remediations Fund to make such a loan and if the Licensee represents to DIA that the estimate(s) for the contractors(s) selected to perform the Remediations are no more than one hundred fifty percent (150%) of the amount of the lowest estimate(s) to perform the Remediations.

22. Loan Program Shall Pay Architect Serving as Construction Manager for Remediations Directly. DIA shall make payment for Remediations directly to the architect serving as construction manager for Remediations with terms of payment to be structured in a manner that encourages timely completion of Remediations in compliance with the ADA Standards. DIA shall have the authority to, in its sole discretion, process payments to architects in accordance with generally accepted practices in construction lending, including, as DIA may deem appropriate, the use of fixed sum contracts, standard AIA documents, progress payments, retainage, and similar requirements. DIA shall not make final payment until the architect has submitted a certification of completion of Remediations in accordance with the Survey Report. DIA shall not be required to make any additional payments for Remediations at an Existing New Construction Place of Lodging during any time period when a Licensee is more than sixty (60) days in arrears on payments actually owed to DIA until such time as the Licensee has paid its actual arrearages. DIA shall require the Licensee to execute a loan agreement and promissory note, requiring the Licensee to repay all such amounts of monies expended by DIA to pay for Remediations and architectural drawings and specifications that are used as the basis for obtaining estimates required for participation in the Loan Program. Any Licensee who obtains payment for Remediations from any architect or contractor under Section 303 of the ADA, under State or local law, or under any contract may, in DIA's sole discretion, be required to immediately submit such payment, exclusive of any attorneys' fees or other costs incurred in obtaining such payment, as an immediate repayment of monies owed to the Loan Program.

23. Payment to Licensees for Certain Costs. The Loan Program shall make payment to Licensees who participate in the Loan Program and who do not opt out of the Loan Program to cover costs actually incurred in obtaining architectural drawings and specifications that are used as the basis for obtaining estimates required for participation in the Loan Program except that the Loan Program shall not pay a Licensee any more than fifteen percent (15%) of the lowest of the three independent estimates required for participation in the Loan Program to cover the costs of obtaining architectural drawings and specifications used as the basis for such estimates. The Loan Program shall not make any payments to Licensees who opt out of the Loan Program.

24. Loan Program to Have Funds Available on Revolving Basis. For any request that is made for a loan pursuant to the terms of this Consent Order for which there are not sufficient funds available, DIA will lend funds, as funds become available as the result of repayments to, or replenishment of, the Remediation Fund, on a "first come, first served" basis. If a Licensee requests a loan for which there are not sufficient funds available, DIA will advise the Licensee of the unavailability of funds and the possibility that funds will become available at a later time during the Funds Availability Period and will subsequently advise the Licensee if funds become available at any time within the Funds Availability Period. During the final year of the Funds Availability Period, DIA will not be required to make a loan from the Loan Program to a Licensee unless, within sixty (60) days after the Licensee's receipt of a notice of availability of funds, the Licensee submits to DIA a certification by the architect or contractor (or, if no architect or contractor is used, the owner) that all Remediations can be completed within the Funds Availability Period. DIA will provide written notice of such certification requirement together with the notice of availability of funds to all Licensees seeking loans from the Loan Program during the last year of the Funds Availability Period.

25. Contact Person to Answer Licensees' Questions About Loan Program. DIA shall designate one or more contact persons knowledgeable about the Loan Program who shall be available to Licensees by telephone to answer Licensees' questions about the mechanics of the Loan Program.

26. Maintenance of Records of Completion of, and Payment for, Remediations. DIA shall maintain accounts and records documenting the completion of Remediations at each Existing New Construction Place of Lodging whose Remediations are financed through the Loan Program, including architects' and/or contractors' certification of completion of Remediations and payments made for Remediations. All such accounts and records shall be subject to audit by the Department at any time subject to the limitations set forth in Section 38. Such accounts and records shall be kept in sufficient detail so as to permit the Department to determine which Licensees elected to have Remediations performed through the Loan Program, the locations of the Places of Lodging where Remediations were performed, when the Remediations were performed, the identity of the persons(s) and/or entities that performed the Remediations, the amount of payment for the Remediations, and when payment for Remediations was made.

27. Loan Program Funding. The amount of funding that will be made available for use in the revolving Remediation Fund pursuant to this Consent Order is based on an estimate of the costs of Remediations at Existing New Construction Places of Lodging and, thus, may not cover the actual costs of performing all Remediations at all Existing New Construction Places of Lodging. DIA and Cendant shall have no liability to Licensees eligible to participate in the Loan Program who are denied loans by the Loan Program as a result of inadequate funding of the Remediation Fund.

PAYMENT IN FURTHERANCE OF THE PUBLIC INTEREST

28. Terms of Payment. Within thirty (30) days after the Effective Date of this Consent Order, Cendant shall make a payment in furtherance of the public interest in the amount of fifty thousand and no/100 dollars ($50,000.00) to the United States.

LIMITATIONS ON LIABILITY

29. Limitations on DIA's and Cendant's Liability under Section 303 (a) (1) of the ADA Relating to Future Places of Lodging. DIA and Cendant shall bear no liability and the Department shall institute no action against DIA and/or Cendant under 42 U.S.C. § 12183 (a) (1) of the ADA at any time following the Effective Date of this Consent Order with respect to any Future Place of Lodging that opens for business during the Term of this Consent Order using any of the Days Marks or the Days Inn System provided that DIA has complied with its obligations to obtain a properly completed Certification of ADA Compliance, completed in accordance with Section 2 of this Consent Order, for such Future Place of Lodging as set forth in this Consent Order.

30. Limitations on DIA's and Cendant's Liability under Section 302 of the ADA Relating to Future Places of Lodging. DIA and Cendant shall bear no liability and the Department shall institute no action against DIA and/or Cendant under 42 U.S.C. § 12182 of the ADA at any time following the Effective Date of this Consent Order with respect to the failure to design and construct any Future Place of Lodging that opens for business during the Term of this Consent Order using any of the Days Marks or the Days Inn System provided that DIA has complied with its obligations to obtain a properly completed Certification of ADA Compliance, completed in accordance with Section 2 of this Consent Order, for such Future Place of Lodging as set forth in this Consent Order.

31. Limitations on DIA's and Cendant's Liability under Section 303(a) (1) of the ADA Relating to Existing New Construction Places of Lodging. DIA and Cendant shall bear no liability and the Department shall institute no action against DIA and/or Cendant under 42 U.S.C. § 12183 (a) (1) at any time after the Effective Date of this Consent Order with respect to any Existing New Construction Place of Lodging, except that the Department may institute any civil action it deems necessary to enforce this Consent Order.

32. Limitations on Certain Licensees' Liability Under 42 U.S.C. § 12183(a)(1). Nothing contained in this Consent Order shall effect the rights and duties of Licensees under Title III, except the United States shall refrain from filing a civil lawsuit or pursuing any other civil or criminal action against a Licensee with respect to an Existing New Construction Place of Lodging based upon any alleged violation of 42 U.S.C. § 12183(a)(1) of the ADA with respect to that Existing New Construction Place of Lodging if the Licensee has completed Remediations at that Existing New Construction Place of Lodging in accordance with the terms of this Consent Order.

33. No Immunity to Nonparties. Except as provided in Section 33 of this Consent Order, this Consent Order confers no rights on, and is not enforceable by, anyone who is not a Party to this Consent Order.


NOTICE AND REPORTING REQUIREMENTS

34. Notice of Participation in the Loan Program. Within ninety (90) days following the Effective Date and every ninety (90) days thereafter until such time as no Licensee remains eligible to make an Election to Participate in the Loan Program, DIA shall provide written notice to the Department identifying each Licensee of an Existing New Construction Place of Lodging who has elected to participate in the Loan Program, which notice shall include the name and address of the Licensee and the address of the Place of Lodging that is to undergo Remediations.

35. Notice of Completion of Remediations. Within one year (365 days) following the Effective Date and every year thereafter throughout the Term of this Consent Order, DIA shall provide written notice to the Department of all Licensees who have completed Remediations under the Loan Program, which notice shall include the name and address of the Licensee and the address of the Existing New Construction Place of Lodging for which Remediations were performed.

36. Report of Funds Expended in Loan Program. Within one year (365 days) following the Effective Date and annually thereafter throughout the Term of this Consent Order, DIA shall report to the Department the total amount paid out during the preceding year to finance Remediations

37. Notices and Reports. All notices and reports required by this Consent Order shall be sent to the Parties at the following addresses or at such other address as the Parties may designate in writing in the future:

For notices to the Department:
John L. Wodatch, Chief
Disability Rights Section
Civil Rights Division
U.S. Department of Justice
1425 New York Avenue, N.W., Room 4039
P.0. Box 66738
Washington, D.C. 20035-6738

 

For notices to DIA and Cendant:
Richard J. Wolf, Esq.
Vice President - Legal
Cendant Corporation
One Sylvan Way
Parsippany, NJ 07054

 

38. Accounts and Records Subject to Audit. DIA shall maintain accounts and records reflecting the performance of their obligations under this Consent Order. Such accounts and records shall be maintained in sufficient detail to permit the Department to verify that all acts required of DIA and Cendant by this Consent Order are actually performed. At any time, upon three (3) business days of notice to DIA, the Department shall have the right to conduct on-site inspection, auditing, and copying of any and all accounts and records maintained by DIA relevant to the provisions of this Consent Order. The Department may not exercise its right to inspect, audit, and copy accounts any more frequently than once every six months.

39. Dispute Resolution. If any Party notifies the other Parties in writing of a dispute over the performance of this Consent Order, the Parties agree to negotiate in an effort to resolve the dispute between themselves. If they are unable to resolve the dispute directly within
fifteen (15) days of receipt of notification of a dispute, they agree to participate in mediation with Linda R. Singer or another mediator designated by ADR Associates. Unless otherwise agreed by the Parties the mediation shall be completed within sixty (60) days of the receipt of the first notification under this Section of the Consent Order. The Parties agree to share the costs of mediation equally. Neither Party shall bring an action to enforce the Consent Order without first complying with this Section.

40. Civil Action to Enforce Consent Order. Any civil action to enforce this Consent Order shall be filed in the U. S. District Court for the Eastern District of Kentucky. In a civil action to enforce this Consent Order, either Party may seek any appropriate relief, including an adjudication of contempt. In addition, the United States may seek relief under 42 U.S.C. § 12188 (b) (2)(C) (ii).

41. Acceleration of Obligations Due Under Consent Order. In the event that DIA and/or Cendant fails to comply in a timely fashion with this Consent Order without obtaining advance written agreement from the United States to file a joint motion to modify the terms of the Consent Order and if the failure to comply continues uncured for a period of thirty (30) days following receipt of a notice of intent to take enforcement action, all terms of the Consent Order then remaining to be performed shall become immediately enforceable in United States District Court.

42. Consent Order Is a Public Document. This Consent Order is a public document. A copy of this document, or any information contained herein, may be made available to any person. DIA, Cendant, and the United States shall provide a copy of this Consent Order to any person or entity upon request.

43. Consent Order Binding on Parties and Successors in Interest. This Consent Order shall be binding on the United States, DIA, Cendant, and the successors in interest of DIA and/or Cendant, and DIA and Cendant have a duty to so notify all such successors in interest of the existence and terms of this Consent Order.

44. Entire Consent Order. This Consent Order constitute the entire agreement between the parties on the matters raised herein, and no other statement, promise, or agreement, either written or oral, made by any of the Parties or agents of any of the Parties, that is not contained in this written Consent Order, shall be enforceable regarding the matters raised herein.

45. Pending Litigation. The Parties will move the U.S. Court of Appeals for the Sixth Circuit to remand the pending appeal to the U.S. Court for the Eastern District of Kentucky for entry of the Consent Order. Within ten (10) days following the Effective Date, the Parties shall submit joint motions to all applicable courts with jurisdiction of Pending Litigation to dismiss such Pending Litigation or otherwise remove it from the court's docket except that the United States shall not dismiss its complaint as against the architect which is pending in the Southern District of Indiana.

46. Term of Consent Order. This Consent Order shall be in full force and effect for a period of ten (10) years after the Effective Date of this Consent Order. Sections 29, 30, 31, 32, and 38 shall survive the termination of this Consent Order.

 

OTHER PROVISIONS


47. Recognition of Certain Licensees. Within thirty (30) days after confirmation by the Department that the Licensees of the Places of Lodging in Elberton, Georgia; Eureka, California; Fort Stockton, Texas; and Johnson Creek, Wisconsin have complied with their obligations under certain settlement agreements or consent decrees negotiated with the United States, DIA and Cendant agree to recognize each of these four Licensees.

48. Guaranty by Cendant. Cendant guarantees DIA's performance of this Consent Order.

49. Severability. If any term of this Consent Order is determined by any court to be unenforceable, the other terms of this Consent Order shall nonetheless remain in full force and effect.

50. Titles. The Titles used in this Consent Order are intended solely to facilitate ease of use and reference by the Parties and shall not be construed to have substantive effect on, modify, or alter the terms of the Consent Order.
ENTERED and ORDERED this day of __________________ 1999.


____________________________________
Joseph M. Hood
United States District Judge

Agreed and Consented to:

 

For the United States of America:

Bill Lann Lee
Acting Assistant Attorney General
Civil Rights Division

John L. Wodatch, Chief
Renee M. Wohlenhaus, Deputy Chief
Disability Rights Section

 

____________________________________
Jeanine M. Worden, Attorney
Disability Rights Section

Dated: _______________

 

____________________________________
Roberta Stinar Kirkendall, Attorney
Disability Rights Section
Civil Rights Division
U.S. Department of Justice
P.O. Box 66738
Washington, D.C. 20035-6738
(202) 307-6556 (telephone)

Dated: _______________

 

For Days Inns of America, Inc. and Cendant Corporation:

 

____________________________________
Joel R. Buckberg
Senior Vice President - Legal
Days Inns of America, Inc. and
Cendant Corporation
One Sylvan Way
Parsippany, NJ 07054

Dated: _______________


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February 15, 2001