United States District Court, E.D. North Carolina, Western Division
C. DEVER III, United States District Judge.
February 7, 2019, Trade Talley, f/k/a Trade Jones
("Talley"), Demorris Walters ("Walters"),
Snante Pruitt ("Pruitt"), Megan Luckey
("Luckey"), and Latoya Glover ("Glover";
collectively, "plaintiffs"), on behalf of
themselves and others similarly situated, filed a second
amended complaint against Lincoln Property Company
("Lincoln"), Lincoln Property Company Manager, Inc.
("LPCM"), Greystone WW Company, LLC, d/b/a
Greystone at Widewaters ("Greystone"), Sterling
Forest Associates, LLC, d/b/a Vert @ Six Forks
("Vert"), and Inman Park Investment Group, Inc.,
d/b/a Inman Park Apartments ("Inman Park";
collectively, "defendants"). Plaintiffs allege that
defendants violated North Carolina's Residential Rental
Agreements Act ("RRAA"), N.C. Gen. Stat §
42-38 et seq., 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. 42].
March 14, 2019, all defendants but Greystone moved to dismiss
plaintiffs' second amended complaint [D.E. 47, 52, 54]
and filed memoranda in support [D.E. 51, 53, 55]. See
Fed.R.Civ.P. 12(b)(2), (6). On May 13, 2019, plaintiffs
responded in opposition [D.E. 62, 63, 64]. On June 17 and 18,
2019, defendants replied [D.E. 73, 74, 75]. On March. 14,
2019, Greystone moved to sever [D.E. 49] and filed a
memorandum in support [D.E. SO]. On May 13, 2019, plaintiffs
responded in opposition [D.E. 61]. On June 11, 2019,
Greystone replied [D.E. 72]. On May 16, 2019, Greystone moved
for judgment on the pleadings [D.E. 65] and filed memoranda
in support [D.E. 66, 76]. On July 8, 2019, plaintiffs
responded in opposition [D.E. 77]. As explained below, the
court grants Inman Park and Vert's motions to dismiss
[D.E. 47, 52], denies Lincoln and LPCM's motions to
dismiss for lack of personal jurisdiction [D.E. 54], grants
Greystone's motion for judgment on the pleadings [D.E.
65], and denies as moot Greystone's motion to sever [D.E.
are former tenants. See 2d Am. Compl. D.E. 42] ¶¶
7-13. Talley leased an apartment from Greystone from April
29, 2014, until April 30, 2018. See id. ¶ 108.
Walters leased an apartment from Greystone from 2013 until
August 31, 2018. See Id. ¶ 130. Pruitt
leased an apartment from Inman Park from November 1, 2017,
until October 31, 2018. See Id. ¶152.
Luckey leased an apartment from Vert from December 18, 2017,
until September 17, 2018. See Id. ¶
174. Glover leased an apartment from Greystone from September
1, 2016, until November 30, 2016. See id. ¶
196-97. Plaintiffs allege that Greystone, Inman Park, and
Vert contract with Lincoln and LPCM to manage their apartment
complexes. See Id. ¶¶ 25, 30, 35.
Plaintiffs also allege that Greystone, Inman Park, and Vert
are vicariously liable for Lincoln and LPCM's actions and
that Lincoln and LPCM defendants enforced the same policies
at all three apartment complexes against plaintiffs and
members of plaintiffs' purported class. See
Id. ¶¶ 44-48.
rent was due on the first day of each month "with no
grace period." E.g., Pl.'s Ex. 1 [D.E.
42-1] 2 ¶ 6; Pl.'s Ex. 5 [D.E. 42-5] 2 ¶ 6;
Pl.'s Ex. 6 [D.E. 42-6] 2 ¶ 6; Pl.'s Ex. 26
[D.E. 42-26] 2 ¶ 6. If plaintiffs did not pay rent on
time, plaintiffs' leases authorized defendants to file
for summary ejectment in state court. See, e.g., Pl.'s
Ex. 1 [D.E. 42-1] 5 ¶ 31; Pl.'s Ex. 5 [D.E. 42-5] 5
¶ 31; Pl.'s Ex. 6 [D.E. 42-6] 5 ¶ 31; Pl.'s
Ex. 26 [D.E. 42-26] 5 ¶ 31. If defendants pursued
summary ejectment, plaintiffs agreed to pay any
"attorneys' fees and all litigation costs to the
extent permitted by law." E.g., Pl.'s Ex. 1 [D.E.
42-1] 5 ¶ 31; Pl.'s Ex. 5 [D.E. 42-5] 5 ¶ 31;
Pl.'s Ex. 6 [D.E. 42-6] 5 ¶ 31; Pl.'s Ex. 26
[D.E. 42-26] 5 ¶ 31. In addition, plaintiffs' leases
authorized defendants to charge one of three fees depending
on how far legal action against a defaulting tenant
progressed: a complaint-filing fee, a court-appearance fee,
or a second trial fee. See. e.g., Pl.'s Ex. 1
[D.E. 42-1] 5 ¶ 31; Pl.'s Ex. 5 [D.E. 42-5] 5 ¶
31; Pl.'s Ex. 6 [D.E. 42-6] 5 ¶ 31; Pl.'s Ex. 26
[D.E. 42-26] 5 ¶ 31; cf N.C. Gen. Stat. §
repeatedly did not pay rent on time and thus were in default.
See 2d Am. Compl. ¶¶ 111, 133, 155, 177, 199.
Because plaintiffs defaulted on their leases, Lincoln and
LPCM sent plaintiffs letters ("the Initial
CollectionLetters") notifying plaintiffs that they would
owe "additional legal charges" upon initiation of
summary ejectment proceedings. Id. ¶ 68:
see Id. ¶¶ 111.133, 155, 177,
199; see, e.g., Pl.'s Ex. 7 [D.E. 42-7]; Pl.'s Ex. 10
[D.E. 42-10]. Defendants began summary ejectment proceedings
if plaintiffs did not pay rent by approximately the 10th day
of each month. See, e.g.. Id. ¶¶
115, 137. Thus, plaintiffs allege that the Initial Collection
Letters threatened to assess "eviction fees"
against plaintiffs if they did not cure their default before
summary ejectment proceedings began. See id. ¶
"eviction fees" comprised the litigation costs that
defendants incurred for initiating a summary ejectment
action: $96.00 for filing a summary ejectment complaint and
$30 for a sheriff to effect service of process. See
id. ¶¶ 119-20, 141-42, 163-64, 185-86,
207-08. The "eviction fees" were
distinct from the complaint-filing fee, court-appearance fee,
or second trial fee that defendants could charge under the
lease. See, e.g.. Id. ¶¶
110, 132. After posting "eviction fees" to a
tenant's account, defendants notified tenants that they
owed "eviction fees" ("the Subsequent
Collection Letter"). Id., ¶ 94; see, e.g.,
Pl.'s Ex. 11 [D.E. 42-11]; Pl.'s Ex. 18 [D.E. 42-18];
Pl.'s Ex. 19 [D.E. 42-19]; Pl.'s Ex. 20 [D.E. 42-20];
Pl.'s Ex. 22 [D.E. 42-22]. Once defendants assessed
"eviction fees," plaintiffs allege that defendants
would not remove them from an account even if defendants did
not pursue or dismissed summary ejectment proceedings.
See Id. ¶ 93. Plaintiffs allege that
Greystone, Ihman Park, and Vert all approved the Subsequent
Collection Letters that Lincoln and LPCM sent to plaintiffs
and similarly-situated tenants. See Id.
all paid the "eviction fees" and defendants
voluntarily dismissed their summary ejectment complaints.
See id. ¶¶ 126-27, 148-49, 170-71, 192-93,
214-15. Plaintiffs claim that, at that time, no attorney had
been hired, no attorney had appeared in court, no hearing had
been held, and no summary ejectment complaint had been filed.
See, e.g., id.¶¶ 120-24,
142-46. Defendants also only sought possession of
plaintiffs' apartments, not money damages. See,
e.g.. Id. ¶¶ 125, 147. Thus, when
plaintiffs paid the "eviction fees," plaintiffs
allege that no court had awarded the "eviction
fees" to defendants. See, e.g.. Id.
¶¶ 128.150. Plaintiffs also allege that they did
not agree to a settlement with defendants. See,
e.g.. Id. ¶¶ 129, 151.
and LPCM, both nonresident business entities, challenge
personal jurisdiction. The court does not have personal
jurisdiction over a nonresident defendant unless personal
jurisdiction comports with North Carolina's long-arm
statute and the Fourteenth Amendment's Due Process
Clause. See, e.g. Mitrano v. Hawes, 377 F.3d 402,
406 (4th Cir. 2004). North Carolina's long-arm statute
extends personal jurisdiction over nonresident defendants to
the extent permitted by the Fourteenth Amendment's Due
Process Clause. See Christian Sci. Bd. of Dirs. v.
Nolan, 259 F.3d 209, 215 (4th Cir. 2001). Thus, the
statutory and constitutional inquiries merge. See
process requires a defendant to have "certain minimum
contacts with the forum such that the maintenance of the suit
does not offend traditional notions of fair play and
substantial justice." Helicopteros Nacionales de
Colombia. S.A. v. Hall, 466 U.S. 408, 414 (1984)
(alteration and quotation omitted). The extent of the
contacts needed for jurisdiction turns on whether the claims
asserted against a defendant relate to or arise out of the
defendant's contacts with the forum state. See ALS
Scan. Inc. v. Dig. Serv. Consultants, Inc., 293 F.3d
707, 712 (4th Cir. 2002). If the defendant's contacts
with the state are the basis for the suit, specific
jurisdiction may exist. Id. In determining specific
jurisdiction, the court considers "(1) the extent to
which the defendant purposefully availed itself of the
privilege of conducting activities in the State; (2) whether
the plaintiffs' claims arise out of those activities
directed at the State; and (3) whether the exercise of
personal jurisdiction would be constitutionally
reasonable." Id. (alteration and quotations
omitted). Thus, the "constitutional touchstone" of
specific personal jurisdiction "remains whether the
defendant purposefully established minimum contacts
in the forum state." Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985) (quotation omitted).
Plaintiffs do not argue that Lincoln and LPCM are subject to
general personal jurisdiction. See [D.E. 63] 5.
the court rules on a motion to dismiss for lack of personal
jurisdiction without conducting an evidentiary hearing, a
plaintiff need only make a prima facie showing of personal
jurisdiction. See Sneha Media & Entm't LLC v.
Associated Broad, Co. P Ltd., 911 F.3d 192, 196-97 (4th
Cir. 2018); Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d
56, 60 (4th Cir. 1993). A plaintiff need not establish
personal jurisdiction by a preponderance of the evidence at
this stage. See Sneha Media, 911 F.3d at 196-97. In
addition, the court construes all relevant jurisdictional
allegations in the light most favorable to the plaintiff and
draws the most favorable inferences for the existence of
jurisdiction. Mylan Labs., Inc., 2 F.3d at 60. The
court has not held an evidentiary hearing. Thus, plaintiffs
need only make a prima facie showing of personal jurisdiction
over Lincoln and LPCM to survive the motion to dismiss.
and LPCM have produced evidence that they do not own
properties in North Carolina, maintain offices or agents in
North Carolina, conduct any business in North Carolina, or
manage any properties in North Carolina. See Austin Decl.
[D.E. 55-1] ¶¶ 5(a)-(g). Thus, the court need not
take plaintiffs' allegations to the contrary as true. See
Wolf v. Richmond Cty. Hosp. Auth.,745 F.2d 904, 908
(4th Cir. 1984); Clark v. Remark.993 F.2d 228, 1993
WL134616, at *2 (4th Cir. 1993) (per curiam) (unpublished
table decision); Bassett v. Strickland's Auto &
Truck Repairs, Inc., No. 1:17CV590, 2018 WL 3542868, at