Kingston Square Tenants v. Tuskegee Gardens, 91-6029-CIV.

• Decision Date: 26 May 1992
• Docket Number: No. 91-6029-CIV.,91-6029-CIV.
• Parties: KINGSTON SQUARE TENANTS ASSOCIATION, Alma Jones, Vanessa Myrick, Mary Ayden, Mary Dicks, Cora Elliott, Betty Golden, Rosa Prescott, Roberta Williams, Loretta Wright, Earnestine Young, Beverly Lewis, Curtis Brown, Hanah Bailey, Betty Brown, Julia Brown, and Mary Ann Clarke, individually and on behalf of all others similarly situated, Plaintiffs, v. TUSKEGEE GARDENS, LTD., Stephen Moses, Partnership Investor Services, Inc., National Investment Development Corporation, Housing Resources Management, Inc., Management Assistance Group, Inc., Millwood Housing Fund, Ltd., A. Bruce Rozet, Deane Earl Ross, Multi-Prop Services, Inc. and Does 1-100, Defendants.
• Court: U.S. District Court — Southern District of Florida

792 F. Supp. 1566

KINGSTON SQUARE TENANTS ASSOCIATION, Alma Jones, Vanessa Myrick, Mary Ayden, Mary Dicks, Cora Elliott, Betty Golden, Rosa Prescott, Roberta Williams, Loretta Wright, Earnestine Young, Beverly Lewis, Curtis Brown, Hanah Bailey, Betty Brown, Julia Brown, and Mary Ann Clarke, individually and on behalf of all others similarly situated, Plaintiffs, v. TUSKEGEE GARDENS, LTD., Stephen Moses, Partnership Investor Services, Inc., National Investment Development Corporation, Housing Resources Management, Inc., Management Assistance Group, Inc., Millwood Housing Fund, Ltd., A. Bruce Rozet, Deane Earl Ross, Multi-Prop Services, Inc. and Does 1-100, Defendants.

No. 91-6029-CIV.

United States District Court, S.D. Florida.

May 26, 1992.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Sharon Diaz, Legal Aid Service of Broward County, Ft. Lauderdale, Fla., for plaintiffs.

Doug Reynolds of Cox & Reynolds, P.A., Ft. Lauderdale, Fla., for Tuskegee Gardens, Ltd.

Mike Shievold, and Marvin Nodel of Conroy, Simberg & Lewis, P.A., Ft. Lauderdale, Fla., for Multi-Prop.

Scott Sarason of Rumberger, Kirk, Caldwell & Weshsler, P.A., Miami, Fla., for A. Bruce Rozet, Deane Earl Ross, and Management Assistance Group, Inc.

AMENDED ORDER ON MOTIONS TO DISMISS

PAINE, District Judge.

This matter comes before the court on the Defendant's, Tuskegee Gardens, Ltd. ("Tuskegee"), Motion to Dismiss, to Strike or in the Alternative for More Definite Statement (DE 20), the Defendants', A. Bruce Rozet ("Rozet"), Deane Earl Ross ("Ross") and the Management Assistant Group, Inc. ("MAGI"), Motion to Dismiss (DE 31) and the Defendant's, Multi-Prop Services, Inc. ("Multi-Prop"), Motion to Dismiss, To Strike, or in the Alternative, for More Definite Statement (DE 46). Having reviewed the record, the memoranda of counsel and relevant authorities, the court enters the following order.

I. BACKGROUND

In the Beginning ... There was Kingston

The Kingston Square Apartments ("Kingston") in Broward County, Florida, has received financial assistance pursuant to Section 236 of the National Housing Act ("NHA"), 12 U.S.C. § 1715z-1, and Section 8 of the United States Housing Act of 1937 ("USHA"), as amended, 42 U.S.C. § 1437 et seq. On December 8, 1988, the tenants residing at Kingston commenced a class action suit captioned Kingston Square Tenants Association, et al. v. Tuskegee Gardens, Ltd. et al., Case No. 88-6957-CIV-PAINE ("Kingston I"), on behalf of themselves and persons similarly situated, seeking primarily injunctive relief from two different sets of Defendants. The first group, the "private" Defendants, included Tuskegee, the former owners of Kingston, as well as, Multi-Prop and Housing Resources Management, Inc. ("HRM"), the former managing agents of Kingston. The other group, the "federal" Defendants, included the United States Department of Housing and Urban Development ("HUD"), Samuel Pierce, former Secretary of HUD, and James T. Chaplin, Director of HUD's regional office in Jacksonville, Florida.

In their Complaint, the Plaintiffs alleged that the Defendants allowed the physical condition of Kingston to deteriorate, posing a danger to their health and well being. It was further alleged that although HUD conducted numerous physical inspections of Kingston, found serious defects, and ordered the private Defendants to remedy the defects, HUD's orders were not complied with. The tenants asked the court to certify the proposed class pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure and declare that the actions of the Defendants violated numerous federal statutes and regulations. In addition, the Plaintiffs asked the court to: (1) declare the private Defendants in regulatory default; (2) take control of Kingston; (3) operate the housing facility in accordance with federal and state law; (4) apply federal subsidies to conduct needed repairs; and (5) stop payment of all federal subsidies to the private Defendants. Monetary damages were also sought in an amount equal to the diminished value of Kingston from the beginning of the Plaintiffs' tenancies until the date suit was filed.

Most of these requests were satisfied or rendered moot when the federal Defendants settled with the Plaintiffs, who agreed to foreclose on Kingston, sell it, and order the new owner to adhere to HUD regulations and guidelines. On July 10, 1989, Kingston was sold at a foreclosure sale to Michael's Development, Inc., a New Jersey Corporation, thereby terminating the ownership and management interests of Tuskegee, Multi-Prop and HRM.

By Order dated October 29, 1990, the court granted the Plaintiffs' Motion for Class Certification and certified a class consisting of individuals residing at Kingston at the commencement of suit. That same Order also denied the Plaintiffs' Motion for Leave to File an Amended Complaint on the grounds of bad faith and delay, amounting to a possible violation of Federal Rule of Civil Procedure 11 by Plaintiffs' counsel. At that time it was noted that the proposed Second Amended Complaint was a substantial departure from the original Complaint in that it would radically convert the action from one seeking injunctive relief, to one based in tort, seeking monetary and punitive damages. The undersigned described the Plaintiffs' potential motivation for their change in course:

The Plaintiffs' have not provided the court with sufficient explanation for their delay in light of the fact that ... they were aware of the parties' relationship and the facts and circumstances relating to their proposed causes of action years prior to filing their original Complaint. Perhaps the fact that Plaintiffs have been successful in gaining injunctive relief from the federal Defendants, is the reason they now seek to change course and recover monetary and punitive damages from the private Defendants and six new Defendants.

End Run: The Son of Kingston

Apparently not pleased with the ruling,¹ the Plaintiffs, on January 16, 1991, instituted the present lawsuit ("Kingston II"), identical in most respects to the Second Amended Complaint the court rejected in Kingston I. Originally assigned by random allocation to another judge in this district, the case was transferred to the undersigned in accordance Rule 6(C) of the General Rules of the United States District Court for the Southern District of Florida.² Two days after commencing the new suit, the Plaintiffs, on January 18, 1991, filed an Emergency Motion for Voluntary Dismissal Without Prejudice, stating that the injunctive relief originally sought in Kingston I had been obtained as the renovation of the housing complex by its new owners was complete. The court granted voluntary dismissal. Thereafter, the Defendants in Kingston II filed Motions to Dismiss, raising numerous grounds for dismissal, including an attack on the court's in personam jurisdiction.

II. ANALYSIS

To 12(b) or Not to 12(b), That is the Question

Pre-Answer Motions, such as a Motion to Dismiss under Federal Rule of Civil Procedure 12(b), or the related Motion for More Definite Statement, may raise two distinct issues: (1) whether the Plaintiff has stated his or her purported claim with sufficient detail; and (2) whether the claim as stated is recognized by the law.

As to the first issue, that is, factual detail, the Federal Rules of Civil Procedure are very liberal. Rule 8(a) provides that the Complaint need only contain "a short and plain statement of the claim...." "All that is required is that the defendant be on notice as to the claim being asserted against him and the grounds on which it rests." Sams v. United Foods & Commercial Workers Int'l Union, 866 F.2d 1380, 1384 (11th Cir.1989) (collecting cases). The parties may, through discovery, inquire further into the details underlying the claim. Bazal v. Belford Trucking Co., Inc., 442 F.Supp. 1089, 1102 (S.D.Fla.1977); see generally 4A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1202 (2d ed. 1990).

As to the viability of a cause of action, the court must first accept all of the Plaintiff's allegations as true. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Thomas v. Burlington Industries, Inc., 769 F.Supp. 368, 370 (S.D.Fla.1991). Consideration of matters beyond the four corners of the Complaint is improper. Milburn v. United States, 734 F.2d 762 (11th Cir.1984); Thomas, 769 F.Supp. at 370. A Motion to Dismiss should not be granted unless the Plaintiff can prove no set of facts in support of his claim entitling him to relief. Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). Thus, a Complaint may not be dismissed because the Plaintiff's claims do not support the legal theories on which he relies because the court must determine if the allegations form a basis for relief on any possible theory. See Robertson v. Johnston, 376 F.2d 43 (5th Cir.1967).³

Judicial Fourplay: Cort v. Ash

The Defendants contend that Counts I and V of the Complaint should be dismissed insofar as the statutes and regulations upon which these claims are based do not provide a private cause of action. Count I seeks damages as a result of the Defendants' alleged violation of 12 U.S.C. § 1715z-1, a statute authorizing periodic interest reduction payments on behalf of the owner of a low income rental housing project, as well as numerous regulations and HUD handbooks promulgated thereunder. Count V sets forth a claim for the Defendants' alleged failure to maintain the physical condition of Kingston in compliance with the USHA and various regulations established in accordance with that statute.

In Cort v. Ash, 422 U.S. 66, 78, 95 S.Ct. 2080, 2088, 45 L.Ed.2d 26 (1975), the United States Supreme Court set forth four criteria used in determining whether a private right of action may be properly implied in a federal statute: (1) does the statute create a federal right in favor of the Plaintiff?; (2) do...