By Montgomery Brower and Dianna Waggoner
Updated December 11, 1989 12:00 PM

When Ken Phillips spotted the newspaper ad for a one-bedroom apartment, he and his live-in girlfriend, Gail Randall, could hardly believe their luck. For months the young couple, who work together in a landscaping business, had been combing the quiet, treelined neighborhood in Chico, Calif., 80 miles north of Sacramento, for a place to rent. What they saw later that evening in 1988 seemed the answer to their dreams: a gingerbread duplex with a bay window edged with pink rosebushes, a tidy front yard and a fireplace—all for $325 a month. The next morning Ken phoned landlady Evelyn Smith and told her, “I want it. What do I have to do to get it?”

Smith, a staunch Christian, made it known she preferred married couples, nonsmokers with no pets. Eager to clinch the deal—and suspecting that Smith’s reluctance to have her tenants living in sin might amount to illegal discrimination—Phillips and Randall went ahead and told her they were married, then put down a $150 deposit. But when Phillips called her soon after and confessed that he and Gail were not husband and wife, Smith replied, “I’ll be happy to refund your deposit.” And she did.

Phillips promptly notified state housing officials, who in turn warned Smith she faced a discrimination charge. But Smith refused to back down, and last August, California’s Fair Employment and Housing Commission ruled that she had indeed broken a state law forbidding housing discrimination on the basis of “marital status” and fined her $954. Claiming the decision violates her constitutional right to the free exercise of her religious beliefs, Smith, 57, plans to appeal—setting the stage for a legal battle that she and the commission are vowing to take to the Supreme Court. “I don’t feel that anybody has the right—by virtue of the fact that they’re landlords or for any other reason—to coerce somebody else to live by what they consider moral conduct,” says Phillips, 30, who has lived with Randall, 26, since 1983. It’s a notion that Smith, who has attended the Bid-well Memorial Presbyterian Church for 25 years, simply cannot abide. “Cohabitation offends me,” she says. “It’s against my religious convictions, and renting to people who do it is like providing a house for prostitutes. Religion isn’t just a matter of believing. If I can’t act like a Christian, it’s meaningless.”

Smith’s husband, Paul, a postman, died in 1987. High school sweethearts, he and Evelyn had been married 32 years and had three children, now grown. While they were unable to stop some of their own kids from cohabiting (all are now married), Evelyn is determined to keep moral standards high at the four duplex apartments, left her by her husband, that are her main source of income. During the recent housing commission hearings, Smith said she feared she would never see Paul in heaven if she allowed Ken and Gail to take the apartment. “I didn’t tell them what to do or what not to do,” she says, “but it’s my building, and I think I have some rights over it.”

She is not alone in her beliefs: Concerned Women for America, a conservative Christian organization in Washington, D.C., has appointed one of its lawyers, Jordan Lorence, to handle her case pro bono. He argues that in this instance California law is treading heavily on individual rights. “The state is pressing its morality down the throat of Mrs. Smith,” says Lorence. “She has the right to have control of her property and bring her ideology or religious convictions into the marketplace.”

Jonathan Lew, assistant chief counsel for the state’s Department of Fair Employment and Housing, says that argument, if upheld, could set a dangerous precedent. “If they created an exception for the so-called exercise of freedom of religion, it would open the door to having moral standards imposed prior to the receipt of any goods or services,” he says. “For instance, if I owned a drugstore and an unmarried couple walked in, can I refuse to sell them birth control devices?”

For their part, Phillips and Randall are hoping for a legal victory that Phillips says will “counterbalance the right-wing, fundamentalist, conservative line of thinking.” Smith, who has rented the apartment to a young married couple, remains adamant about sticking to her principles regardless of public opinion or any court decision. “If the Lord comes down and tells me, ‘Evelyn, you’re doing it wrong,’ maybe I could change,” she says. “But I can’t just because it’s not popular.”

Meanwhile Phillips and Randall have settled into a different arrangement. After being turned down by Smith, they rented a new house, and shortly afterward Randall also took an apartment in Chico. “I wanted a little more independence,” she says. “But don’t misunderstand. Ken and I are actually closer now than ever before. We don’t see any reason to get married. We’re happy with the way things are now.” That’s not surprising. Their spacious home, on the edge of a valley with a breathtaking view of blue sky, tall trees and a wandering stream, is in a town 20 miles from Chico. It’s called Paradise.

—Montgomery Brower, Dianna Waggoner in Chico