United States District Court, E.D. North Carolina, Western Division
C. DEVER III UNITED STATES DISTRICT JUDGE.
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"). 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].
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'
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.
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.
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. 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.
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.
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.
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).
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).
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.
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). 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