Addi v. Corvias Management-Army, LLC
| Decision Date | 27 August 2020 |
| Docket Number | Civil Action No. ELH-19-3253 |
| Parties | JOSEPH ADDI, et al., Plaintiffs, v. CORVIAS MANAGEMENT-ARMY, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
In a First Amended Complaint (ECF 40), plaintiffs, all active-duty service members and their families who have resided or currently reside in Maryland at U.S. Army Installation Fort George G. Meade ("Fort Meade"), have filed a class action suit against defendants Corvias Management-Army, LLC ("Corvias") and Meade Communities, LLC ("Meade"). Defendants are responsible for the operation, construction, and maintenance of housing at Fort Meade (id. ¶ 7) and plaintiffs complain about mold and other housing conditions.1
Plaintiffs, 22 adults and 21 children, seek monetary damages as well as injunctive relief. ECF 40 at 102. In addition, they seek appointment of "a Special Master to oversee the inspection and remediation process . . . ." Id. Further, they seek to enjoin defendants from collecting any basic allowance for housing ("BAH") from the service members, pending completion of remediation. And, they seek to bar defendants from leasing any property that has not been certified as safe from mold contamination. Id.
The suit also seeks certification of two classes. The first, under Fed. R. Civ. P. 23(b)(2), consists of "all service members and their families who live in housing on Fort Meade managedby Defendants from the present through the date of final judgment in this action (the '(b)(2) Class'). . . ." Id. ¶ 397. The second, under Fed. R. Civ. P. 23(b)(3), consists of "all tenants who, within the limitations period through the date of final judgment in this action, had [resident occupancy agreements] with Defendants for housing on Fort Meade and from whom the Defendants collected rent (the '(b)(3) Class')." Id.
The First Amended Complaint ("FAC" or "Amended Complaint") is over 100 pages in length and includes one exhibit. ECF 40-1. In the proverbial "kitchen sink" approach, the FAC lodges fifteen claims:2 negligence (Count I); gross negligence (Count II); negligent breach of warranty to repair (Count III); breach of contract (Count IV); tort arising out of breach of contract (Count V); constructive eviction (Count VI); violation of § 3951(a) of the Servicemembers Civil Relief Act (Count VII); violation of the Maryland Code, Real Property Article ("R.P."), § 8-211 (Count VIII); breach of the implied covenant of quiet enjoyment, R.P. § 2-115 (Count IX); unjust enrichment (Count X); unfair and deceptive trade practices, under Md. Code, Commercial Law Article ("C.L.") § 13-301 (Count XI); negligent misrepresentation (Count XII); fraud (Count XIII); nuisance (Count XIV); and civil conspiracy (Count XV). ECF 40, ¶¶ 406-527. Counts I, III, V, VII, IX, XII, XIV, and XV are brought by the named plaintiffs and the (b)(2) Class plaintiffs. Counts II, VI, and VIII are brought by the named plaintiffs. Counts IV, X, and XI are brought by the named plaintiffs and all Class plaintiffs. And, Count VIII is brought by the (b)(2) Class plaintiffs.
Defendants have moved to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). ECF 43. The motion is supported by a memorandum of law. ECF 43-1 (collectively, the "Motion"). It is also supported by three exhibits. ECF 43-2 to ECF 43-4. Plaintiffs oppose the Motion. ECF 44 (the "Opposition"). Defendants have replied. ECF 45 (the "Reply").
The parties do not agree on much. But, they agree that Maryland law generally governs the claims in the FAC. See 28 U.S.C. § 5001(b)( ("In a civil action bought to recover on account of an injury sustained in a place [subject to the exclusive jurisdiction of the United States within a State], the rights of the parties shall be governed by the law of the State in which the place is located."). See also ECF 43-1 at 8; 21, 23, 26; ECF 43-2, ¶ 6(a); ECF 43-3, ¶¶ 11, 21, 33(a); ECF 43-4, ¶ 14; ECF 44 at 9 n.1.
No hearing is necessary to resolve the Motion. See Local Rule 105.6. For the reasons that follow, I shall grant the Motion in part and deny it in part.
In 1996, Congress passed the National Defense Authorization Act, which authorized the development of the military Housing Privatization Initiative ("MHPI"). ECF 40, ¶ 11. The goal was to improve housing for military families by "outsourcing construction and maintenance of military housing to private contractors." Id. Developers receive federal loans as well as guaranteed rental income through payment of the service member's basic allowance for housing ("BAH"). Id. ¶ 12. Fort Meade, "home to a major Army installation, the National Security Agency, and multiple other commands," participates in the MHPI. Id. ¶ 13.
On April 20, 2002, the Secretary of the Army "signed a 50-year ground lease for land only with Defendant [Meade] to operate the military base housing 'in good order and in a clean, safe condition' at its expense." ECF 40, ¶ 14. John Picerne is the president and CEO of Meade. Id. ¶ 15.
A few weeks later, on May 1, 2002, Meade "signed a property management agreement with Picerne Management/FM, LLC ('Picerne Management') to manage the housing on Fort Meade." Id. ¶ 20. Picerne was the president and Chief Executive Officer ("CEO") of Picerne Management. Id. ¶ 24. Plaintiffs allege that in 2013 Picerne Management "merged into" Corvias. Id. ¶ 22. And, Picerne is Corvias's president and/or CEO. Id. ¶ 23. According to plaintiffs, "the contract between [Meade] and Picerne Management (now Corvias) for property management was signed by Picerne on behalf of both entities." Id. ¶ 24. Plaintiffs assert that defendants "use 'Corvias' as the outward-facing, brand name for their property management services." Id. ¶ 29.
Plaintiffs allege that defendants "operate all on-base housing at Fort Meade." Id. ¶ 31. They add that defendants' housing is the only on-base housing option for service members and their families. Id. ¶ 37. Plaintiffs assert that, in "undertaking to take over operations and management of housing on Fort Meade from the Army," defendants "stated that their purpose was to 'guide Fort Meade families . . . from today's stoic acceptance of obsolescent housing and catch-as-catch-can maintenance to a nirvana of planned Neighborhoods and no-hassle living.'" Id. ¶ 28.
Defendants have attached to the Motion a copy of the Ground Lease. ECF 43-2 (the "Ground Lease").4 It establishes a 50-year lease of the land and "reflects the concurrent conveyance of the then-existing housing improvements on Ft. Meade from the United States to Meade." ECF 43-1 at 4. Further, it states that Meade "shall at all times during the term of this Ground Lease faithfully observe and comply with, at its sole cost and expense, the provisions of all applicable Federal, State, and local laws, rules, regulations, orders, ordinances, and other government standards and requirements." Id. at 8, ¶ 6(a). The Ground Lease also requires Meade to "exercise due care in the protection of all property located on the Site against fire or damage from any and all other causes." Id. at 14, ¶ 10(c).
In addition, the Ground Lease provides, id. at 9, ¶ 8:
The Lessee [Meade] shall be permitted to assign, sublease, or otherwise transfer all or any portion of its rights and/or obligations hereunder with the prior consent of the Secretary, except that no consent shall be required for leases to persons entitled to rent dwelling units in accordance with Condition 12 hereof ("Permitted Tenants"). Any assignment or sublease granted by the Lessee shall be subject to and consistent with all of the terms and conditions of this Ground Lease and shall terminate immediately upon the expiration or any earlier termination of this Ground Lease. Under any assignment made, the assignee shall be deemed to have assumed all of the obligations of the Lessee under this Ground Lease and all other documents and agreements incorporated into this Ground Lease from and after the date of the assignment. No sublease shall relieve the Lessee of any of its obligations hereunder. . . .
Paragraph 10a of the Ground Lease states, id. at 13: "The Lessee shall keep the Project in good order and in a clean, safe condition by and at the expense of the Lessee and in accordance with the requirements of the Ground Lease and Exhibit E, incorporated herein by reference."
And, the Ground Lease states, id. at 16, ¶ 12(a):
The Project shall be operated as a first class residential rental development for Permitted Tenants. Specifically, the Project shall be managed in accordance with the management procedures and protocols set forth in Condition 10a and in Exhibit E, and the failure of the Lessee so to manage the Project in accordance with the level of service designated therein, shall be a Default, subject to all applicable cure rights set forth therein.
Exhibit E to the Ground Lease is titled "Project Management Procedures and Protocols." ECF 43-2 at 37. It states, id.:
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