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Hampton v. KPM LLC

United States District Court, E.D. North Carolina, Western Division

October 30, 2019

KENNETH HAMPTON, et al., Plaintiffs,
v.
KPM LLC, et al., Defendants.

          ORDER

          JAMES C. DEVER III UNITED STATES DISTRICT JUDGE.

         On July 20, 2018, Kenneth Hampton ("Hampton"), Gabrielle Harris ("Harris"), and Alisa Brogden ("Brogden"; collectively, "plaintiffs"), on behalf of themselves and others similarly situated, filed a complaint in Wake County Superior Court against KPM LLC ("KPM"), KPM Carolinas LLC ("KPM Carolinas"), Kotarides Holdings, LLC ("Kotarides"), Hillandale North LLC, 2052 LLC, d/b/a Clairmont at Brier Creek ("Clairmont at Brier Creek"), and 1752 LLC, d/b/a Clairmont at Perry Creek ("Clairmont at Perry Creek"; collectively, "defendants").[1] Plaintiffs allege that defendants violated the North Carolina Residential Rental Agreements Act ("RRAA"), N.C. Gen. Stat. § 42-38 et secu, the North Carolina Debt Collection Act ("NCDCA"), N.C. Gen. Stat. § 75-50 et seq,, and the North Carolina Unfair and Deceptive Trade Practices Act ("UDTPA"), N.C. Gen. Stat. § 75-1 et seq., [D.E. 1-3]. On October 12, 2018, defendants removed the action to this court [D.E. 1]. On November 8, 2018, defendants answered and alleged counterclaims for breach of contract [D.E. 21]. On January 22, 2019, defendants amended their answer [D.E. 30].

         On March 5, 2019, plaintiffs moved to dismiss defendants' counterclaim for lack of subject- matter jurisdiction [D.E. 38] and filed a memorandum in support [D.E. 39]. On March 26, 2019, defendants responded in opposition [D.E. 44]. On April 23, 2019, plaintiffs replied [D.E. 52]. On March 25, 2019, defendants moved for judgment on the pleadings [D.E. 40] and filed a memorandum in support [D.E. 41]. On May 15, 2019, plaintiffs responded in opposition [D.E. 55]. On June 19, 2019, defendants replied [D.E. 58]. On March 25, 2019, Hampton moved for judgment on the pleadings [D.E. 42] and filed a memorandum in support [D.E. 43]. On May 14, 2019, defendants responded in opposition [D.E. 53]. On June 18, 2019, plaintiffs replied [D.E. 57]. As explained below, the court denies Hampton's motion for judgment on the pleadings, grants defendants' motion for judgment on the pleadings, denies as moot plaintiffs' motion to dismiss defendants' counterclaims, and dismisses plaintiffs' complaint.

         I.

         Plaintiffs are former tenants who leased apartments at Clairmont at Brier Creek from defendants. See Compl. [D.E. 1 -3] ¶¶ 8-10, 27, 54, 75, 94. Hampton leased an apartment from May 25, 2016, until May 24, 2017, and paid a monthly rent of $l, 010.00. See id ¶¶54, 56. Harris leased an apartment from April 18, 2016, until April 17, 2017, and also paid a monthly rent of $1, 010.00. See id ¶¶ 75, 77- Brogden leased an apartment from February 2L, 2017, until February 20, 2019, and paid a monthly rent of $1, 225.00. See id ¶¶ 94, 97.

         Under plaintiffs' leases, rent was due on the first day of each month. See, e.g.. Pl.'s Ex. 1 [D.E. 1-3] 34;cf. Compl. [D.E. l-3]¶27. Failure to pay rent on time constituted a default See, e.g.. Pl.'s Ex. 1 [D.E. 1-3] 41-42 ¶ 38. If a tenant defaulted, the leases authorized defendants to file a summary ejectment complaint in state court See Id. If defendants did so, plaintiffs agreed in the leases to pay the highest of three fees depending on how far legal action against plaintiffs progressed: a complaint filing fee, a court appearance fee, or a second trial fee. See id.; cf. N.C. Gen. Stat. § 42- 46(e)-(g). In addition, plaintiffs agreed to pay "court costs, attorneys' fees, and any other monetary damages or costs arising" from the breach of the lease. Pl.'s Ex. 1 [D.E. 1-3] 41-42 ¶ 38.

         Plaintiffs allege that defendants follow a regular procedure if a tenant fails to timely pay rent. See Compl. [D.E. 1-3] ¶ 31. First, on approximately the fifth day of the month, defendants cause written letters or emails to be delivered to the tenant stating that the tenant "will also be charged for court costs" if the tenant fails to cure the default. Id. ¶ 36; see Pl.'s Ex. 3 [D.E. 1-3] 44. Next, on approximately the fourteenth day of the month, defendants charge the tenant "eviction fees," sometimes without a court order and before filing a complaint against the tenant, and file a legal action to evict the tenant. Compl. [D.E. 1-3] ¶¶ 44-45.[2] The "eviction fees" are me court filing fees ($96.00), sheriff service fees ($30.00), and attorneys' fees (a flat fee). See id ¶¶ 30-35. These fees are allegedly "additional fees separate and apart from the ones expressly authorized by" section 42-46oftheRRAA. Id.¶ 32. Once defendants entered me "eviction fees" onto a tenant's account, plaintiffs allege that defendants would not review or remove the fees even if defendants improperly assessed the fees or a summary ejectment action was dismissed. See Id. ¶¶ 52-53.

         Plaintiffs repeatedly did not pay rent on time. Specifically, Hampton did not pay rent on time for eleven consecutive months. See Compl. [D.E. 1-3] ¶ 59. Harris did not pay rent on time for ten consecutive months. See Id. ¶ 78. Brogden also did not pay rent on time on several occasions. See Id. ¶ 98. Defendants then sent plaintiffs letters stating that plaintiffs would owe applicable court and attorneys' fees if defendants initiated summary ejectment proceedings. See Id. ¶¶ 59, 78, 98. On several occasions, plaintiffs failed to cure their default and defendants placed the "eviction fees" on plaintiff's accounts. See id.¶¶63, 82, 102. In each instance, the "eviction fees" amounted to $201. See id ¶¶ 63, 82, 102.

         Plaintiffs allege that, when defendants added eviction fees to plaintiffs' accounts, no hearing had been held, no attorney had appeared in court to evict plaintiffs, defendants had not hired an attorney to collect any debt, and defendants had not served plaintiffs with a complaint. See Id. ¶¶ 66-68, 85-87, 105-07. For each instance of default, plaintiffs cured their defaults by paying rent and the "eviction fees," and defendants voluntarily dismissed their summary ejectment complaints without prejudice. See Id. ¶¶ 71-72, 90-91, 110-11. Plaintiffs allege that no court awarded fees to defendants and that plaintiffs did not settle with defendants. See id, ¶¶ 73-74, 92-93, 112-13.

         II.

         Federal Rule of Civil Procedure 12(c) permits a party to move for judgment on the pleadings "[a]fter the pleadings are closed-but early enough not to delay trial." Fed.R.Civ.P. 12(c). A motion for judgment on the pleadings should be granted if "the moving party has clearly established that no material issue of fact remains to be resolved and the party is entitled to judgment as a matter of law." Park Univ. Enters, v. Am. Cas. Co. of Reading, 442 F.3d 1239, 1244 (10th Cir. 2006) (quotation omitted), abrogated on other grounds by Magnus. Inc. v. Diamond State Ins. Co., 545 Fed.Appx. 750 (10th Cir. 2013) (unpublished); see Mayfield v. Nat'l Ass'n for Stock Car Auto Racing. Inc., 674 F.3d 369, 375 (4th Cir. 2012); Burbach Broad. Co. of Del- v Elkins Radio Corp., 278 F.3d 401, 405-06 (4th Cir. 2002).

         The same standard applies to a motion for judgment on the pleadings as to a motion to dismiss for failure to state a claim. See Burbach Broad. Co., 278 F.3d at 405-06. When a court evaluates a motion for judgment on the pleadings, it must construe the facts and reasonable inferences "in the light most favorable to the [nonmoving party]." Massey v. Ojaniit, 759 F.3d 343, 347, 352-53 (4th Cir. 2014) (quotation omitted): see Clatterbuck v. City of Charlottesville, 708 F.3d 549, 557 (4th Cir. 2013), abrogated on other grounds by Reed v. Town of Gilbert 135 S.Ct. 2218 (2015); Burbach Broad. Co., 278 F.3d at 406. A court must determine whether a pleading is legally and factually sufficient. See Iqbal, 556 U.S. at 677-80, 684; Twombly, 550 U.S. at 554-70; Giarratano v Johnson, 521 F.3d 298, 302 (4th Cir. 2008). A pleading "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Iqbal, 556 U.S. at 678 (quotation omitted); see Twombly, 550 U.S. at 570; Giarratano, 521 F.3d at 302. Moreover, a court need not accept a pleading's legal conclusions drawn from the facts. Iqbal, 556 U.S. at 678-79; Giarratano, 521 F.3d at 302. Similarly, a court "need not accept as true unwarranted inferences, unreasonable conclusions, or arguments." Giarratano, 521 F.3d at 302 (quotation omitted).

         In evaluating a motion for judgment on the pleadings, the court may consider the pleadings and any materials referenced in or attached to the pleadings, which are incorporated by reference. See Fed.R.Civ.P. 10(c); Favetteville Inv'rs v. Commercial Builders. Inc., 936 F.2d 1462, 1465 (4th Cir. 1991). A court also may consider "matters of which a court may take judicial notice," such as public records. Tellabs. Inc. v. Makor Issues & Rights. Ltd., 551 U.S. 308, 322 (2007). In addition, a court may consider documents attached to a motion for judgment on the pleadings so long as those documents are "integral to the complaint" and authentic. Philips v. Pitt Cty. Mem'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009); see Rockville Cars. LLC v. City of Rockville. Md., 891 F.3d 141, 145 (4th Cir. 2018).

         The parties' motions require the court to consider the plaintiffs' state law claims, and North Carolina law applies. Accordingly, this court must predict how the Supreme Court of North Carolina would rule on any disputed state-law issue. See Twin City Fire Ins, Co. v. Ben Arnold-SunbeltBeverage Co. of S.C., 433 F.3d 365, 369 (4th Cir. 2005). In doing so, the court must look first to opinions of the Supreme Court of North Carolina. See id.; see also Stable v. CTS Corp.,817 F.3d 96, 100 (4th Cir. 2016). If there are no governing opinions from that court, this court may consider the opinions of the North Carolina Court of Appeals, treatises, and "the practices of other states." Twin City Fire Ins. Co., 433 F.3d at 369 (quotation omitted).[3] In predicting how the highest court of a state would address an issue, this court must "follow the decision of an intermediate state appellate court unless there [are] persuasive data that the highest court would decide differently." Toloczko, 728 F.3d at 398 (quotation omitted); Hicks v. Feiock,485 U.S. 624, 630 & n.3 (1988). Moreover, in predicting how the highest court of a state would address an issue, this court "should not create or expand a [s]tate's public policy." Time Warner ...


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