Falconi-Sachs v. LPF Senate Square, LLC

• Decision Date: 07 July 2016
• Docket Number: No. 14–CV–433.,14–CV–433.
• Citation: Falconi-Sachs v. LPF Senate Square, LLC, 142 A.3d 550 (D.C. 2016)
• Parties: Maia FALCONI–SACHS, Appellant, v. LPF SENATE SQUARE, LLC, et al., Appellees.
• Court: D.C. Court of Appeals

142 A.3d 550

Maia FALCONI–SACHS, Appellant

v.LPF SENATE SQUARE, LLC, et al., Appellees.

No. 14–CV–433.

District of Columbia Court of Appeals.

Argued Oct. 13, 2015.

Decided July 7, 2016.

Daniel Hornal, Washington, DC, for appellant.

Ward B. Coe III, with whom David W. Kinkopf and Hillary H. Arnaoutakis, Baltimore, MD, were on the brief, for appellees.

Before BLACKBURNE–RIGSBY and EASTERLY, Associate Judges, and PRYOR, Senior Judge.

PER CURIAM:

Appellant Maia Falconi–Sachs appeals from an order dismissing her complaint pursuant to Superior Court Rule of Civil Procedure 12(b)(6) for failure to state a claim. Having paid a late rent fee of $249.85, she alleges that this fee—assessed and collected by appellees, apartment building LPF Senate Square LLC (“Senate Square”), and Bozzuto Management Company, LLC (“Bozzuto”)—was illegal under various theories. We affirm the Superior Court's 12(b)(6) ruling as to all claims but one: Ms. Falconi–Sachs's claim of unjust enrichment. As to that claim, we reverse and remand for further proceedings consistent with this opinion.

I. Facts

On August 24, 2011, appellant and another person (both recent law school graduates) signed a one-year lease agreement—with a term beginning on that date—for a Senate Square apartment at 201 I Street Northeast, Washington, D.C. 20002. The lease named appellant and the other person as the “Lessee,” Senate Square as the “Lessor,” Bozzuto as the lessor's “Agent,” and set the monthly rent amount at $2,499.00. The lease section entitled “Rent Payments” included a clause (in capital letters) as follows:

RENT PAYMENTS NOT RECEIVED BY THE FIFTH (5TH) DAY OF THE MONTH FOR WHICH SAID PAYMENT IS DUE SHALL BE SUBJECT TO A LATE PAYMENT CHARGE OF TEN PERCENT (10%) OF THE MONTHLY RENT AND SUCH LATE CHARGE WILL BE IMMEDIATELY DUE AND PAYABLE AS ADDITIONAL RENT PURSUANT TO THE TERMS OF THE LEASE. PROVIDED, HOWEVER, IN THE EVENT LESSEE FAILS TO PAY THE RENT WITHIN FIVE (5) DAYS AFTER THE DUE DATE, SUCH FAILURE SHALL BE CONSIDERED A WILLFUL NON–COMPLIANCE AND THE LESSOR OR ITS AGENTS MAY PROCEED WITH LEGAL ACTION PURSUANT TO STATE LAW. THE LESSEE SHALL BE RESPONSIBLE FOR ALL COSTS, INCLUDING ATTORNEY'S FEES, EXPENDED BY THE LESSOR OR HIS AGENT, IN ENFORCING THE COLLECTION OF ANY DELINQUENT RENT AND/OR LATE CHARGES AS PERMITTED BY STATE LAW. [Emphasis in original]

On April 6, 2012, appellees placed a “Final Notice Letter” under appellant's door, informing her that her April rent had not been received, and that a late fee in the amount of $249.85 was due immediately. Appellant gave appellees a check for $249.85 on April 21, 2012.

II. Procedural History

On June 27, 2012, appellant filed a class action complaint in the District of Columbia Superior Court, alleging violations of the Consumer Protection Procedure Act (“CPPA”), fraud, negligent misrepresentation, unconscionability, and restitution/unjust enrichment. She amended the complaint on July 12, 2012, in order to add appellees' addresses for service of process. On August 16, 2012, the case was removed to the United States District Court for the District of Columbia, but later was remanded and appellees were ordered to pay appellant's attorneys' fees. Falconi–Sachs v. LPF Senate Square, LLC, 963 F.Supp.2d 1, 3 (D.D.C.2013). On February 14, 2013, the case was re-opened in Superior Court, and appellant filed a motion for class certification. Appellant later orally requested without opposition that the motion for class certification be stayed, and the trial court granted her request. On June 21, 2013, appellant filed a subsequent amended complaint. Appellees then filed a motion to dismiss on July 12, 2013, and the motion was granted on February 7, 2014.

The trial court dismissed appellant's CPPA cause of action, holding that it “falls within the realm of landlord-tenant relations and thus outside the scope of the CPPA.” The court further held that appellant's fraud and negligent misrepresentation claims failed to meet the respective elements of those torts, that her unconscionability claim failed to plead sufficient facts to show either procedural or substantive unconscionability, and that her unjust enrichment claim was barred by the voluntary payment doctrine. This appeal followed.

III. Analysis

A. Scope of Review

This court reviews de novo the dismissal of a complaint under Superior Court Rule of Civil Procedure 12(b)(6) for failure to state a claim on which relief can be granted. Tingling–Clemmons v. District of Columbia, 133 A.3d 241, 245 (D.C.2016). “In so doing, we apply the same standard the trial court was required to apply, accepting the [factual] allegations in the complaint as true and viewing all facts and drawing all reasonable inferences in favor of the plaintiff[ ].” Id. (quoting Hillbroom v. PricewaterhouseCoopers LLP, 17 A.3d 566, 572 (D.C.2011) ). “To pass muster,” a complaint must “allege the elements of a legally viable claim, and its factual allegations must be enough to raise a right to relief above the speculative level.” Id. (quoting OneWest Bank, FSB v. Marshall, 18 A.3d 715, 721 (D.C.2011) ); see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ).

B. CPPA

With respect to appellant's CPPA claims, this court has previously addressed the question whether the CPPA applies to landlord-tenant relations. See Gomez v. Independence Mgmt. of Delaware, Inc., 967 A.2d 1276, 1286 (D.C.2009) (holding that the CPPA does not apply to landlord-tenant relations). In Gomez, we found that although the Council of the District of Columbia amended the enforcement provisions of the CPPA to no longer limit the CPPA's private right of action contained in D.C.Code § 28–3905 to the jurisdictional boundaries of the Department of Consumer and Regulatory Affairs (“DCRA”)—which “may not ... apply the provisions of section 28–3905 to ... landlord-tenant relations”—this limitation had been deleted only for budgetary reasons to remove the DCRA's under-funded role. Id. at 1287. In other words, the Council had no intention of “expand[ing] the reach of the CPPA,” id. at 1287, and “did not intend by that amendment to extend the private right of action created by the CPPA into the realm of landlord-tenant relations.” Id. at 1286.¹ Accordingly, appellant's CPPA claims were appropriately dismissed for failure to state a claim upon which relief can be granted.

C. Fraud

The elements of fraud are “(1) a false representation, (2) made in reference to a material fact, (3) with knowledge of its falsity, (4) with the intent to deceive, and (5) an action that is taken in reliance upon the representation.” In re Estate of Nethken, 978 A.2d 603, 607 (D.C.2009) (emphasis added). Here, appellant alleges that appellees committed fraud by falsely representing “that [appellant] had the obligation to pay late fees and attorney's fees.” Appellant's claim fails, however, because the alleged misrepresentation is in essence an alleged misrepresentation of law, not a misrepresentation of fact. Thus, even when we accept appellant's allegations as true, she fails to allege the second element of fraud, which is material fact. Accordingly, appellant's fraud claim was appropriately dismissed.

D. Negligent Misrepresentation

To prevail on this claim, appellant must show that appellees (1) “made a false statement or omitted a fact that he had a duty to disclose; (2) that it involved a material issue; and (3) that [appellant] reasonably relied upon the false statement or omission to [her] detriment.” Sundberg v. TTR Realty, LLC, 109 A.3d 1123, 1131 (D.C.2015) (citation omitted, emphasis added).

Here, unlike in the fraud context, a plaintiff alleging negligent misrepresentation “need not allege that the defendant had knowledge of the falsity of the representation or the intent to deceive.” Id. However, she must still show that the appellees falsely stated (or omitted) a material fact. Thus, as we have already discussed in the fraud context, appellant's negligent misrepresentation claim fails because they only amount to an allegation that appellees misrepresented the law—not that they misrepresented the facts. Accordingly, the trial court did not err in dismissing appellant's claim for negligent misrepresentation.

E. Unconscionability

The doctrine of unconscionability is generally applied as an affirmative defense, not a cause of action. Williams v. Cent. Money Co., 974 F.Supp. 22, 28 (D.D.C.1997) (“The claim of common law unconscionability appears to apply only defensively, for example, as a response to an attempt to enforce a contract.”) (citing Restatement (Second) of Contracts § 208 comment g); see also Findlay v. CitiMortgage, Inc., 813 F.Supp.2d 108, 122 (D.D.C.2011) (“At common law ... unconscionability was used as a defense in contract actions, not as a basis for obtaining damages in tort.”) (citing Williams v. Walker–Thomas Furniture Co., 350 F.2d 445, 449 (D.C.Cir.1965) ). For this reason, we do not reach the merits of the parties' arguments regarding the sufficiency of appellant's unconscionability claim and affirm the trial court dismissal of this claim.²

F. Unjust Enrichment/Restitution

The doctrine of unjust enrichment applies “when a person retains a benefit (usually money) which in justice and equity belongs to another.” Jordan Keys & Jessamy, LLP v. St. Paul Fire & Marine Ins. Co., 870 A.2d 58, 63 (D.C.2005). The recipient of such a benefit has “a duty to make restitution to the other person ‘if the circumstances of its receipt or retention are such that, as between the two persons, it is unjust for [the recipient] to retain it.’ ” Id. (quoting Restatement of Restitution § 1 cmt. c (Am. Law Inst. 1937)). The elements of an unjust enrichment claim are “(1) the plaintiff conferred a benefit on the defendant; (2) the defendant retains the benefit; and (3) under the circumstances, the defendant's retention of the benefit is unjust.”...