Reyes v. Julia Place Condominiums Homeowners Association, Inc. et al
ORDER AND REASONS denying 385 Motion for Reconsideration ; granting in part and denying in part 387 Motion for Reconsideration. Signed by Judge Helen G. Berrigan on 08/20/2014. (kac)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
NICOLE REYES, ET AL
JULIA PLACE CONDOMINIUMS
HOMEOWNERS ASSOCIATION, INC.,
ORDER AND REASONS1
Before the court is a Motion for Reconsideration of a denial of a 12(b)(6) Motion to
Dismiss submitted by defendants Steeg Law (“Steeg”) and Margaret V. Glass (“Glass”). Rec.
Doc. 385. Also before the court is the plaintiffs’ Motion for Reconsideration on the partial
granting and partial denial of the defendants’ Motion to Dismiss. Rec. Doc. 387. Both Motions
for Reconsideration are opposed. Having considered the record, the law, and the submissions of
counsel, the motions are DENIED, except to clarify that the previous Order and Reasons did not
dismiss plaintiffs’ claim against the condominium association defendants under the Louisiana
I. Fair Debt Collection and Practices Act
On reconsideration, the court agrees with the plaintiffs that, pursuant to Federal Rule of
Civil Procedure 15(c)(1)(B), the amendments to the pleadings should relate back to the date of
the original pleading, August 9, 2012. Thus, plaintiffs whose FDCPA cause of action originated
after August 9, 2011 are not timed-barred from participating in this action.
However, Plaintiff Mike Sobel’s FDCPA causes of action against the defendants Steeg
and Glass are time-barred for reasons set out in the previous Motion to Dismiss. Rec. Doc. 380 at
Ardis Strong, a second-year student at Brooklyn Law School, assisted with the preparation of this order.
10. The lien letter against Sobel was sent in July of 2008 and the ensuing lien was filed in July
of 2009. Rec. Doc. 343-1 at 5. This is three years prior to the filing of the original complaint in
this case. Furthermore, Sobel does not plead adequate evidence that subsequent communications
between himself and Steeg were “intimidating or harassing.” Rec. Doc. 380 at 10 (“Numbers on
a ledger cannot intimidate or harass.”); see also Bell v. CSD Collection Specialist, No. 11-280BAJ, 2013 WL 311841 at *3 (M.D. La. Jan. 25, 2013); Beattie v. D.M. Collections, Inc., 754 F.
Supp. 383, 394 (D. Del. 1991). Furthermore, Sobel’s claims that the locks were changed as a
form of retaliation are more properly asserted against the defendant Homeowner Associations
rather than against Steeg or Glass. Rec Doc. 380 at 10. For these reasons, Sobel’s FDCPA
claims against Steeg and Glass were properly dismissed.
II. Louisiana Unfair Trade Practices Act
The Court views the defendants’ assertion that all of the LUTPA claims related to the
drafting of the condominium declarations are perempted as a new motion to dismiss rather than a
request for reconsideration. Steeg and Glass’s original Motion to Dismiss the Third Amended
Complaint, asserts only that plaintiff Sobel’s LUTPA claims are perempted. Rec. Doc. 343-1 at
9. For all other LUTPA claims, Steeg and Glass argued only that plaintiffs had failed to show
that SteegLaw has violated any portions of LUTPA as a matter of law. Rec. Doc. 343-1 at 14.
The Court has withheld judgment on whether SteegLaw’s drafting of the condominium
declarations violated LUTPA pending further discovery on this issue. Rec. Doc. 153 at 12. The
courts generally review LUTPA cases on a case-by-case basis. Reingold v. Swiftships, Inc., 126
F.3d 645, 653 (5th Cir. 1997) (citing Marshall v. Citicorp Mortgage, Inc., 601 So.2d 669, 670
(La.Ct.App. 5th Cir.1992)). According to the language of LUTPA , “any person who suffers any
ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use
or employment by another person of an unfair or deceptive method, act, or practice declared
unlawful by R.S. 51:1405, may bring an action individually but not in a representative capacity
to recover actual damages.” La. Rev. Stat. Ann. § 51:1409. “A trade practice is ‘unfair’ when it
offends established public policy and when it is immoral, unethical, oppressive, or unscrupulous.
A trade practice is deceptive when it amounts to fraud, deceit, or misrepresentation. A trade
practice does not have to be both unfair and deceptive to violate the law.” Monroe Med. Clinic,
Inc. v. Hosp. Corp. of Am., 622 So. 2d 760, 763 (La. Ct. App. 1993) writ denied, 629 So. 2d
1135 (La. 1993).
In this case, the Court has already held that the plaintiffs do have claims against Steeg for
violations of Louisiana Usury Laws. Rec. Doc. 380 at 11. Furthermore, plaintiffs have
adequately pleaded facts regarding the claim that Steeg illegally profited from the collection of
usurious interest and late fees by sending inflated initial assessments, charging more late fees,
collecting attorney’s fees, compounding interest, and threatening unit owners with illegal liens.
Rec. Doc. 325 at 4. Given SteegLaw’s alleged role in the drafting of these declarations and
collecting debts on behalf of the Condominium Homeowner’s Associations, there is enough
indication of unethical and unscrupulous practices that may violate LUTPA. To dismiss these
claims on the merits at this time would be premature.
The defendants claim that Sobel’s LUTPA claims should be dismissed, regardless of the
merits, because they were perempted at the end of June 2007. Rec. Doc. 385-1 at 5. However,
Louisiana law allows for continuing tort theory to apply in cases where there has been an
ongoing violation of the law. Crump v. Sabine River Auth., 98-2326 (La. 6/29/99), 737 So. 2d
720, 728 (“A continuing tort is occasioned by continual unlawful acts and for there to be a
continuing tort there must be a continuing duty owed to the plaintiff and a continuing breach of
that duty by the defendant.”); S. Cent. Bell Tel. Co. v. Texaco, Inc., 418 So. 2d 531, 533 (La.
1982) (“Where the cause of the injury is a continuous one giving rise to successive damages,
prescription dates from cessation of the wrongful conduct causing the damage.”). Louisiana
courts have further extended the theory of continuing torts in cases where continued violations of
other statutes gave rise to a LUTPA claim. See Capitol House Pres. Co. v. Perryman
Consultants, Inc., 98-1514 (La. App. 1 Cir. 12/10/98), 725 So. 2d 523, 528 (holding that each
day the defendants failed to disclose a known violation of the Riverboat Economic Development
and Gaming Control Act constituted a new violation of the statutory duty and may constitute an
unfair trade practice); Fox v. Dupree, 633 So. 2d 612, 614 (La. Ct. App. 1993), writ denied, 635
So. 2d 233 (La. 1994) (holding that the peremptive term could not begin until a loan broker
complied with the law because every day he is in violation gives rise to a new right of action for
an unfair trade practice); Benton, Benton & Benton v. Louisiana Pub. Facilities Auth., 95-1367
(La. App. 1 Cir. 4/4/96), 672 So. 2d 720, writ denied, 96-1445 (La. 9/13/96), 679 So. 2d 110
(applying “continuing tort” to extend peremption period in a LUTPA action, where alleged
violations of Louisiana Anti-trust Act were ongoing). Thus, if the defendants’ alleged violations
of the FDCPA and Louisiana usury laws prove true, then the continuing tort theory may apply
and toll peremption of the LUTPA claims.
Because the Sobel has stated a facially plausible claim for relief, the defendants’ Motion
to dismiss the LUTPA claims regarding the condo declarations was properly DENIED. For the
same reasons, the defendants’ Motion to Dismiss plaintiffs’ LUTPA claims regarding the
drafting and enforcement of the declarations for the other condo associations is also DENIED.
III. Louisiana Condominium Act
The plaintiffs seek clarification on the Court’s ruling to dismiss the claims against Steeg
and Glass for violations of the Louisiana Condominium Act (“LCA”). In ruling to dismiss the
defendant’s LCA claims, the Court was referring specifically to defendants Steeg and Glass. Just
as Condominium Associations have a private right of action against unit owners, La. Rev. Stat.
§9:1124.115, the courts have repeatedly recognized unit owners’ private rights of action against
condominium associations. See FMC Enterprises, L.L.C. v. Prytania-St. Mary Condominiums
Ass'n, Inc., 12-1634 (La. App. 4 Cir. 5/15/13), 117 So. 3d 217, 221; Caracci v. Cobblestone Vill.
Condo. Ass'n, 03-1487 (La. App. 5 Cir. 5/26/04), 877 So. 2d 1000, 1002, writ denied, 2004-2290
(La. 11/19/04), 888 So. 2d 207; Roach v. Kamath, 02-1309 (La. App. 4 Cir. 12/30/02), 837 So.
2d 118, writ denied, 2003-0308 (La. 4/4/03), 840 So. 2d 1219. However, actions by Steeg and
Glass, who are neither unit owners nor a condominium association, fall outside the reaches of the
LCA. See Peyton Place Condominium Assoc., Inc. v. Guastella, 08-365 (La. App. 5 Cir.
5/29/09) 18 So. 132, 154. Therefore, the defendants’ motion to dismiss the LCA claims against
Steeg and Glass was properly GRANTED.
The defendants request the court to dismiss with prejudice Count Five of the Third
Amended Complaint for negligence as it relates to defendants Steeg and Glass. Since the
defendants did not raise this issue in their original motion, it would be improper for the court to
make a ruling on this issue at this time. See Ross v. Marshall, 426 F.3d 745, 763 (5th Cir. 2005)
(“These motions [to Reconsider] cannot be used to raise arguments which could, and should,
have been made before the judgment issued.”). As such, the court declines to rule on whether
the plaintiffs can rightfully assert a claim of negligence against defendants Steeg and Glass. This
issue should be brought before the court in a new dispositive motion prior to the motion
Accordingly, and for the reasons set forth above, IT IS ORDERED that Steeg and Glass’s
motion for reconsideration is DENIED. Rec. Doc. 385. IT IS FURTHER ORDERED that
plaintiffs’ motion for reconsideration is GRANTED IN PART and DENIED IN PART. Rec.
New Orleans, Louisiana, this 20th day of August, 2014.
HELEN G. BERRIGAN
UNITED STATES DISTRICT COURT
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