Reyes v. Julia Place Condominiums Homeowners Association, Inc. et al
Filing
273
ORDER AND REASONS denying 141 Motion for Summary Judgment; denying 142 Motion for Sanctions; granting in part and denying in part 144 Motion to Dismiss for Lack of Jurisdiction, Motion to Dismiss for Failure to State a Claim,Motion to Dismis s Party unless plaintiff amends her complaint to claim defendant is a debt collector within ten days, in which case the motion shall be DENIED; granting in part and denying in part 154 Motion to Dismiss for Lack of Jurisdiction, Motion to Dismis s for Failure to State a Claim, Motion to Dismiss Party unless plaintiff amends her complaint to claim defendant is a debt collector within ten days, in which case the motion shall be DENIED; granting in part and denying in part 155 Motion to Dis miss for Lack of Jurisdiction, Motion to Dismiss for Failure to State a Claim, Motion to Dismiss Party unless plaintiff amends her complaint to claim defendant is a debt collector within ten days, in which case the motion shall be DENIED. FURTHER ORDERED that if plaintiff wishes to amend her complaint to allege that Mills Row, Carondelet and/or Gallery Place are debt collectors rather than Steeg or Glass, she shall do so within 10 days. Signed by Judge Helen G. Berrigan on 09/10/2013. (kac, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NICOLE REYES, ET AL
CIVIL ACTION
VERSUS
NO. 12-2043
JULIA PLACE CONDOMINIUMS
HOMEOWNERS ASSOCIATION,
INC., ET AL
SECTION “C” (3)
ORDER AND REASONS
Before the Court are five motions: (1) defendant Parkview Condominiums Homeowners
Association's ("Parkview") motion for summary judgment; Rec. Doc. 141; (2) Parkview's motion
for sanctions; Rec. Doc. 142; (3) defendant Mills Row Condominiums Homeowners Association,
Inc.'s ("Mills Row") motion to dismiss and to drop mis-joined defendant; Rec. Doc. 144; (4)
defendant Carondelet Place Condominiums Owners Association, Inc.'s ("Carondelet Place") motion
to dismiss and to drop mis-joined defendant; Rec. Doc. 154; (5) defendant Gallery Row
Condominiums Association, Inc.'s ("Gallery Row") motion to dismiss and to drop mis-joined
defendant; Rec. Doc. 155. The Court applies its past ruling on several similar motions to the current
motions. Rec. Doc. 153. Having considered the record, the memoranda of counsel, and the law, the
Court rules as follows.
I. BACKGROUND
Nicole Reyes, individually and as class Representative of two classes, the Federal Debt
Collection Practices Act (“FDCPA”) class and the Louisiana Usurious class, filed this complaint
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under the FDCPA, Louisiana usury law, Louisiana Deceptive Trade Practices Act (“LUTPA”), and
the Louisiana Condominium Act. Rec. Docs. 1 & 40. In the complaint, plaintiff brings claims for
alleged usurious late fees, interest and the acceleration of payments in alleged violation of the
mandatory 30-day debt notification requirements under the FDCPA. Rec. Doc. 1 at 2. Reyes brings
the claims against 15 Condominium Associations throughout the New Orleans area, the Steeg Law
Firm, LLC and Margaret V. Glass (collectively, “Steeg”). Id. Plaintiff alleges that Steeg directed
the Condominium Associations to set Condominium Declarations that facially violate Louisiana
usury laws by illegally authorizing interest rates of 18%, late fees exceeding 40% of the principal,
and attorney fees that are assessed before the unit owner receives any notification that debt is owed
in violation of the FDCPA. Rec. Doc. 1 at 3.
II. STANDARD OF REVIEW
A. Rule 12(b)(1) and 12(b)(6) Standard of Review
The standard of review for a Rule 12(b)(1) motion to dismiss for lack of subject matter
jurisdiction is the same as that for a Rule 12(b)(6) motion under the Federal Rules of Civil
Procedure. Benton v. U.S., 960 F.2d 19, 21 (5th Cir. 1992); U.S. v. City of New Orleans, No. Civ.
A. 02-3618, 2003 WL 22208578, at *1 (E.D. La. 2003). When considering a motion to dismiss
under Rule 12(b)(6) for failure to state a claim upon which relief can be granted, a district court
must accept the factual allegations of the complaint as true and resolve all ambiguities or doubts
regarding the sufficiency of the claim in favor of the plaintiff. See Fernandez-Montes v. Allied
Pilots Ass’n, 987 F.2d 278, 284 (5th Cir. 1993). However, threadbare recitals of the elements of
a cause of action, supported by mere conclusory statements, will not suffice. Ashcroft v. Iqbal,
556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S.
544). To survive a motion to dismiss under Rule 12(b)(6), a complaint must contain sufficient
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factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2009). The
face of the complaint must contain enough factual matter to raise a reasonable expectation that
discovery will reveal evidence of each element of the plaintiff’s claim. Lormand v. U.S.
Unwired, Inc., 565 F.3d 228, 256-57 (5th Cir. 2009). If there is insufficient factual allegations to
raise a right to relief above the speculative level, Twombly, 550 U.S. at 555, or if it is apparent
from the face of the complaint that there is an insuperable bar to relief, Jones v. Bock, 549 U.S.
199, 215 (2007), the claim must be dismissed. Unless it appears “beyond a doubt that the
plaintiff can prove no set of facts in support of his claim,” the complaint should not be dismissed
for failure to state a claim. Id. at 284-85 (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 787
S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). However, conclusory allegations or legal conclusions
masquerading as factual conclusions will not suffice to defeat a motion to dismiss. See
Blackburn v. City of Marshall, 42 F.3d 925, 931 (5th Cir. 1995) (citing Fernandez-Montes, 987
F.2d at 284).
B. Summary Judgment Standard of Review
Rule 56 of the Federal Rules of Civil Procedure states: “The Court shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” FED.R.CIV.P. 56. When considering
whether any genuine issues of material fact exist, courts view the evidence and inferences drawn
from that evidence in the light most favorable to the non-moving party. United States ex re.
Reagan v. East Texas Medical Center Regional Healthcare System, 384 F.3d 168, 173 (5th Cir.
2004) (citing Daniels v. City of Arlington, Texas, 246 F.3d 500, 502 (5th Cir. 2001)). An issue is
material if its resolution could affect the outcome of the action. Wyatt v. Hunt Plywood Co., Inc.,
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297 F.3d 405, 409 (5th Cir. 2002) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,
106 S.Ct. 2502, 91 L.Ed.2d 202 (1986)). A factual dispute precludes summary judgment if the
evidence would permit a reasonable jury to return a verdict for the nonmoving party. Hunt v.
Rapides Healthcare Sys. LLC, 277 F.3d 757, 762 (5th Cir. 2001).
The party moving for summary judgment bears the initial burden of “informing the
district court of the basis for its motion, and identifying those portions of [the record] which it
believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett,
477 U.S. 317, 322 (1986). “If the moving party meets the initial burden of showing that there is
no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence
or designate specific facts showing the existence of a genuine issue for trial.” Engstrom v. First
Nat’l Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 32224). In order to satisfy its burden, the nonmoving party must put forth competent evidence and
cannot rely on “unsubstantiated assertions” and “conclusory allegations.” See e.g., Hopper v.
Frank, 16 F.3d 92 (5th Cir. 1994); Lujan v. Nat’l Wildlife Federation, 497 U.S. 871, 871-73
(1990). The mere argued existence of a factual dispute will not defeat an otherwise properly
supported motion. See Anderson v. Liberty Lobby Inc., 477 U.S. 242, 247-48 (1996). “If the
evidence is merely colorable, or is not significantly probative,” summary judgment is
appropriate. Id. at 249-50.
III. LAW AND ANALYSIS
A. Standing
Defendants Parkview, Mills Row, Carondelet Place and Gallery Row all argue that the
plaintiff has not suffered an injury-in-fact that is traceable to the defendants. Rec. Doc. 141 at 34; Rec. Doc. 144 at 5-8; Rec. Doc. 154 at 5-9, and Rec. Doc. 155 at 5-9. See Steel Co. v. Citizens
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for a Better Environment, 523 U.S. 83, 103-03 (1998); Lujan v. Defenders of Wildlife, 504 U.S.
555, 560 (1992). The Court has already found in its previous ruling that the Juridical Link
Doctrine gives plaintiffs standing to bring claims on behalf of the class against defendants from
whom she has not sustained a direct injury. See Rec. Doc. 153 at 5-7 (discussing the same claim
against a different defendant to whom this same factual scenario applies). For the same reasons,
the Court denies defendants' motion to find that the plaintiff does not have standing to bring the
claims against them. Rec. Doc. 141; Rec. Doc. 144; Rec. Doc. 154 and Rec. Doc. 155.
B. Misjoinder
Defendants Parkview, Mills Row, Carondelet Place and Gallery Row all argue that the
claims against them should be dismissed as a violation of Rule 20 of the Federal Rules of Civil
Procedure. Rec. Doc. 141 at 3; Rec. Doc. 144 at 13-14; Rec. Doc. 154 at 15-16; Rec. Doc. 155 at
15-16. The Court previously explained that permissive joinder would become relevant if no
class is certified, and that it refrains from ruling on permissive joinder in this class action suit as
it stands at this time. Rec. Doc. 153 at 7. The Court follows its previous ruling, and denies the
defendants' motions to dismiss based on misjoinder.
C. Summary Judgment for Parkview
Parkview moves the Court to grant summary judgment on whether it fulfilled the
plaintiff's request for its production of documents rather than on the legal allegations made in the
complaint. Rec. Doc. 141 at 4. The Court shall not make a blanket conclusion that Parkview
"did not engage in any of the conduct that makes up Plaintiff's case." Id. Hence, summary
judgment is denied. Rec. Doc. 141. Parkview's motion for summary judgment is premature.
D. Parkview's Motion for Sanctions
Parkview moves to sanction Reyes for filing this suit, which it alleges is frivolous. Rec.
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Doc. 142 at 1. Parkview moves for sanctions under Rule 11 of the Federal Rules of Civil
Procedure. The Court has not found that Reyes' case is frivolous, and therefore, it denies
Parkview's motion for sanctions. FED.R.CIV.P. 11(b) & (c). Rec. Doc. 142.
E. Additional Claims brought by Mills Row, Carondelet and Gallery Row
1. Supplemental Jurisdiction over the claims against defendants
Defendants Mills Row, Carondelet and Gallery Row argue that the Court does not have
supplemental jurisdiction over Ms. Reyes’ allegations of violation of Louisiana usury law
because it is a purely state law allegation and do not form a part of the same case or controversy.
28 U.S.C. 1367(a). Rec. Doc. 144 at 8-9; Rec. Doc. 154 at 9-11; Rec. Doc. 155 at 9-10. Mills
Row, Carondelet and Gallery Row claim that Reyes' FDCPA claims are only brought against
Steeg and Glass and therefore, there is no supplemental jurisdiction for claims against them. Rec.
Doc. 144 at 9; Rec. Doc. 154 at 10; Rec. Doc. 155 at 9-10. To the contrary, Reyes alleged in her
complaint that with regard to FDCPA violations and violations of the Louisiana usury laws,
"[u]pon information and belief, similar acts also occurred with the 20 other Condominium
Associations represented by Steeg." Rec. Doc. 1 at 18. The Court finds that the claims for
violations of Louisiana usury law arise out of the same case or controversy as Ms. Reyes’ claims
for violations of the FDCPA. The Court does not, at this time, assert its discretion to dismiss
claims that are supplemental to its federal question jurisdiction.
2. That there are plausible, factual allegations against defendants
The Court finds that plaintiff has plead plausible, factual allegations against Mills Row,
Carondelet and Gallery Row. Rec. Doc. 144 at 11-12; Rec. Doc. 154 at 11-14; Rec. Doc. 155 at
11-14. Throughout the complaint, plaintiff refers to "the Condominium Associations" rather
than referring to Mills Row or Carondelet specifically by name. See e.g. Rec. Doc. 1 at 18. This
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is sufficient. With twenty original defendants, it would not have been realistic to require
plaintiff to name each defendant nor each Condominium Declaration every time she referenced a
claim.
3. Defendants' claim that they are not debt collectors under the FDCPA
The Court agrees with Mills Row, Carondelet and Gallery Row's allegation that they are
not debt collectors under the FDCPA. Rec. Docs. 144 at 12-13; Rec. Doc. 154 at 14; Rec. Doc.
155 at 14. The Court follows the same ruling that it made when Julia Place Condominium
Association ("JPCA") brought this claim. Rec. Doc. 153 at 13-14. The claims against Mills Row
and Carondelet under the FDCPA shall be dismissed if Reyes does not amend her complaint
within 10 days to argue that Mills Row, Carondelet and Gallery Row are a debt collectors rather
than that Steeg and Glass are the debt collectors at issue here.1
4. Louisiana Usury Laws
Mills Row, Carondelet and Gallery Row adopted the arguments made by JPCA regarding
whether they charge usurious rates. Rec. Doc. 144 at 13; Rec. Doc. 154 at 15; Rec. Doc. 155 at
14-15. The Court found that JPCA had assessed penalties against Reyes that were usurious. It
makes the same finding for Mills Row and Carondelet. Should they choose to make other claims
regarding this based on the class allegations, the Court will entertain those claims separately.2
5. LUPTA Claims
Mills Row, Carondelet and Gallery Row adopt JPCA's LUPTA claims arguments. Rec.
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The Court is aware that Reyes amended her complaint after the filing of these motions,
and it shall assess any claims that become relevant after the second amended complaint
separately. Rec. Doc. 168.
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The parties are advised, in the interest of judicial economy, to submit joint motions in
the future rather than submitting several motions from different parties making the same
arguments.
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Doc. 144 at 13; Rec. Doc. 154 at 15; Rec. Doc. 155 at 15. They make no other arguments in
support of granting their motion to dismiss this claim. Therefore, as the Court found for JPCA, it
denies Mills Row and Carondelet's motion to dismiss this claim. Rec. Doc. 144 at 13; Rec. Doc.
154 at 15; Rec. Doc. 155 at 15.
V. CONCLUSION
Accordingly,
IT IS ORDERED that defendant Parkview Condominiums Homeowners Association's
motion for summary judgment is DENIED. Rec. Doc. 141.
IT IS FURTHER ORDERED that defendant Parkview Condominiums Homeowners
Association's motion for sanctions is DENIED. Rec. Doc. 142.
IT IS FURTHER ORDERED that defendant Mills Row's motion to dismiss and drop misjoined defendants is GRANTED IN PART and DENIED IN PART unless plaintiff amends her
complaint to claim defendant is a debt collector within ten days, in which case the motion shall be
DENIED. Rec. Doc. 144.
IT IS FURTHER ORDERED that defendant Carondelet Place Condominiums Association,
Inc.'s motion to dismiss and drop mis-joined defendants is GRANTED IN PART and DENIED IN
PART unless plaintiff amends her complaint to claim defendant is a debt collector within ten days,
in which case the motion shall be DENIED. Rec. Doc. 154.
IT IS FURTHER ORDERED that defendant Gallery Place Condominiums Association, Inc.'s
motion to dismiss and drop mis-joined defendants is GRANTED IN PART and DENIED IN PART
unless plaintiff amends her complaint to claim defendant is a debt collector within ten days, in which
case the motion shall be DENIED. Rec. Doc. 155
IT IS FURTHER ORDERED that if plaintiff wishes to amend her complaint to allege that
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Mills Row, Carondelet and/or Gallery Place are debt collectors rather than Steeg or Glass, she shall
do so within 10 days.
New Orleans, Louisiana, this 10th Day of September, 2013.
__________________________
HELEN G. BERRIGAN
UNITED STATES DISTRICT JUDGE
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