Johnson v. Lendlease (US) Pub. P'ships

• Decision Date: 05 July 2022
• Docket Number: 7:21-CV-188-D
• Parties: SKYLEE JOHNSON, TAYLER JOHNSON, and SCOTTLYN JOHNSON, minors, by their Guardian ad Litem, LINDSEY JOHNSON, SCOTT JOHNSON, and LINDSEY JOHNSON, Plaintiffs, v. LENDLEASE U.S. PUBLIC PARTNERSHIPS LLC, et al., Defendants.
• Court: U.S. District Court — Eastern District of North Carolina

SKYLEE JOHNSON, TAYLER JOHNSON, and SCOTTLYN JOHNSON, minors, by their Guardian ad Litem, LINDSEY JOHNSON, SCOTT JOHNSON, and LINDSEY JOHNSON, Plaintiffs, v. LENDLEASE U.S. PUBLIC PARTNERSHIPS LLC, et al., Defendants.

No. 7:21-CV-188-D

United States District Court, E.D. North Carolina, Southern Division

July 5, 2022

ORDER

JAMES C. DEVER III United States District Judge

On October27,2021, Skylee Johnson, Tayler Johnson, and Scottlyn Johnson, by and through their guardian ad litem Lindsey Johnson, and Scott and Lindsey Johnson (collectively “the Johnsons” or “plaintiffs”) filed an amended complaint in Onslow County Superior Court against Lendlease (US) Public Partnerships, LLC (“Lendlease”), Lendlease (US) Public Partnerships Holdings LLC (“Lendlease Holdings”), AMCC Managing Member LLC, Atlantic Marine Corps Communities LLC (“AMCC”), AMCC Property Management LLC, WR South LLC; Winn Management Company LLC, and Winn Management Group LLC (collectively, “defendants”) [D.E. 1-1]. On October 29,2021, defendants removed the case to this court [D.E. 1]. On November 5, 2021, defendants moved to dismiss the amended complaint under Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6) and filed a memorandum and exhibits in support [D.E. 12,13]. On December 13,2021, the Johnsons responded in opposition and filed exhibits in support [D.E. 34]. On January 10,2022, defendants replied [D.E. 44]. As explained below, the court grants in part and denies in part defendants' motion to dismiss.

I.

The Johnsons are North Carolina citizens who lived at MCB Camp Lejeune from October 2015 through June 2019. See Am Compl. [D.E. 1-1] ¶¶ 1, 8. All defendants are Delaware or Massachusetts limited liability companies doing business in North Carolina. See id. ¶¶ 10-18. AMCC Managing Member, AMCC, and AMCC Property Management^[1] have their principal places of business in Tennessee. See id. ¶¶ 12-3,14. Lendlease Holdings is the sole member of AMCC Managing Member, which is an indirect subsidiary of an Australian multinational corporation also called Lend Lease. See id. ¶ 12. AMCC Managing Member has a controlling two-thirds interest in AMCC and is the active managing member. See id. ¶ 13; [D.E. 34] 5-6. The U.S. Navy owns a passive one-third interest in AMCC. See Am. Compl. ¶ 13. AMCC Property Management's sole member is Winn Housing Services LLC, which is managed by other Winn entities not parties to this lawsuit. See id. ¶ 15. AMCC Property Management is a division of Winn Management Company. See Id. ¶ 16; [D.E. 34-19] ¶ 2.

■ The Johnsons allege that in 2005, the U.S. Navy selected the multinational Lend Lease to construct and renovate military housing at MCB Camp Lejeune. See Am. Compl. ¶¶ 27-28. The Navy executed a 50-year ground lease with AMCC Managing Member to construct and manage military housing units. See id, ¶¶ 19,28; [D.E. 34-7] (recorded memorandum summarizing the terms of the ground lease and listing AMCC Managing Member as the lessee). Construction of the military housing at MCB Camp Lejeune finished sometime between 2013 and 2015. See Id. ¶¶ 29, 41. The Johnsons allege that Lendlease did part of the construction, renovation, or demolition work. See id. ¶ 10. The Knox Landing development, into which the Johnsons moved, was one of the last developments completed. See id. ¶ 29. AMCC was formed as part of the operation to “own, lease, manage, acquire, operate, and maintain” the units. Id. ¶ 26: see [D.E. 34-7] 3 (stating the ground lease contemplated AMCC Managing Member “immediately assign[ing] all of its interest, rights, title, liability and obligations” to AMCC). And the Johnsons allege AMCC Property Management and Winn Management Company employed some of the repair and maintenance personnel that worked on the military housing at MCB Camp Lejeune. See Am. Compl. ¶ 18. WR South, which works “in real estate management,” allegedly “assisted Winn with regard to MCB Camp Lejeune.” Id. ¶ 17 (quotation omitted).

First Sergeant Scott Johnson is a career member of the U.S. Marine Corps. See Id. ¶ 39. On October 23,2015, Johnson executed a lease to rent a duplex at 7061 Omaha Road, Tarawa Terrace, North Carolina. See id. ¶ 31. The duplex is in the Knox Landing development, and the Johnsons were the first family in the duplex. See id. ¶¶ 29,41. The Johnsons paid rent for the duplex “equal to the Basic Allowance for Military Housing at the ‘with dependent' rate (the ‘BAH') at the Resident's duty station of the pay grade of the Resident Service Member.” Id. ¶ 35; see Lease [D.E. 13-7] ¶3A. The rate was non-negotiable. See Am. Compl. ¶ 35.

The Johnsons' lease was a form lease. It lists AMCC as the owner of the duplex and AMCC Property Management as the property manager authorized to act on AMCC's behalf. See Id. ¶ 31; Lease at 3. The lease states that AMCC, as the owner, is “responsible for maintenance and repair of the Premises, and for ensuring that the Premises are safe and habitable.” Lease ¶ 12; cf. Am. Compl. ¶ 32. The lease incorporates by reference a document called “the Community Guidelines and Policies” that specifies “additional Owner maintenance responsibilities.” Lease ¶ 13. The Johnsons allege that the Community Guidelines and Policies document promises that AMCC would “improve quality of life for service members and their families,” would “assume responsibility for the military family Resident's housing at MCB Camp Lejeune,” and that AMCC Property Management's staff would “assist Residents in every possible way to ensure superior quality housing services and amenities.” Am. Compl. ¶¶ 33-34; [D.E. 34-14] 5. The lease also contains a mold addendum promising that the “Landlord will respond in accordance with the local, federal and state guidelines to repair or remedy.” [D.E. 13-7] 19; cf. Am. Compl. ¶ 37.

After living for several months in the new duplex, the Johnsons began to notice problems with water intrusion and water damage, including a cracked foundation and damage to the kitchen, living room, wiring, and electrical outlets. See Am. Compl. ¶¶ 42-43. The water damage led to mold growing in the bedrooms, kitchen, bathrooms, around window sills and electrical outlets, and in at least one closet. See id. ¶¶ 46-49. On one occasion, the Johnsons found water and mold near the microwave. See id. ¶¶ 47-48. The Johnsons also allege that water damage to the home's smoke alarms triggered the alarms unnecessarily. See id. ¶¶ 52,55. Water also intruded into light fixtures in the home, causing the lights to flicker and bum out. See Id. ¶ 51. The water intrusion caused the foundation of the house to shift, creating a gap in the wall between one of the children's bedrooms and the garage, letting in air from the outside. See id. ¶¶ 53-54. The gap revealed termite activity and stains from water damage. See Id. ¶ 54.

The Johnsons made numerous service calls requesting repair and maintenance but the problems continued unmitigated. See id. ¶¶ 43,45. As for the mold hear the microwave, repair personnel removed the microwave, cleaned the moldy area, and reinstalled the microwave without addressing the cause of the mold. See id. ¶¶ 47-48. As for water and mold in the electrical outlets, repair personnel came, took pictures, and cleaned the exterior of the outlets but otherwise did not investigate the cause or extent of the mold. See id. ¶ 49. Even after the fire department warned the Johnsons that water in the electrical outlets was a safety hazard, defendants did not remediate the issue but instead advised the Johnsons simply to not use their electrical outlets. See id. ¶ 50. As for the gap in the wall, defendants caulked the gap, but it reappeared in less than one week See id. ¶ 54. When Lindsey Johnson met with Jim Ferenczy and Jamie Miller, representatives of the defendants, to discuss the issues, Ferenczy fell asleep at one meeting and at another Miller “berated” Johnson for reporting the issues. Id.¶59.

In Fall 2018, repair personnel began remediation work on the front of the duplex. The Johnsons were asked to temporarily move during the repair work. Unfortunately, Hurricane Florence halted the repairs. After the hurricane, the repair personnel never completed their work, the work they completed was inadequate, and the water and mold problems worsened. See id. ¶¶ 56-58. When the Johnsons returned to the duplex, the locks had been changed and the Johnsons had difficulty finding who had the keys, even though their personal property was still in the duplex. See id. ¶ 57. The Johnsons allege that the water and mold problems in the duplex were never adequately addressed or remediated. See Id. ¶ 60.

In June 2019, the Johnsons vacated the duplex. See Id. ¶ 62. In August 2019, the Johnsons . paid a testing company to test the air in the duplex. The testing company found microbial contamination in the air and on surfaces in the duplex. See id. ¶ 63. The Johnsons allege this contamination caused them physical illness, including weight loss, fatigue, and nausea and that they were harmfully exposed to mold and fungi while they lived in the duplex. See id. ¶ 64. The Johnsons also allege they have undergone medical testing that confirms the connection between their illnesses and the microbes and mold in the duplex. See Id. ¶ 65.

The Johnsons allege (1) unfair and deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 (“UDTPA”), (2) violations of the North Carolina Residential Rental Agreements Act, N.C. Gen. Stat. §§ 42-38, et seq. (“RRAA”), (3) negligence, and (4) breach of contract. See id. ¶¶ 66-107.

II

Defendants concede the court has personal jurisdiction over AMCC, AMCC Property Management, and Lendlease, but they argue the court lacks personal jurisdiction over Lendlease Holdings, AMCC Managing Member, Winn Management...