Ojo v. Milrose 179 Harrison, LLC
| Decision Date | 04 March 2021 |
| Docket Number | Civ. No. 20-00949 (KM) (ESK) |
| Parties | OLUKAYODE D. OJO and OLATUNBOSUN G. OJO, Plaintiffs, v. MILROSE 179 HARRISON, LLC, and EHRLICH, PETRIELLO, GUDIN, & PLAZ, Defendants. |
| Court | U.S. District Court — District of New Jersey |
The plaintiffs, Olukayode D. Ojo and Olatunbosun G. Ojo, rented an apartment owned by Milrose 179 Harrison, LLC. Disputes arose over the habitability of the apartment and the Ojos' refusal to pay rent. Milrose, though its counsel, Ehrlich, Petriello, Gudin, & Plaz, then initiated an action against the Ojos in New Jersey landlord-tenant court, resulting in the Ojos vacating the apartment. Now in this Court, the Ojos, proceeding pro se, have sued Milrose and Ehrlich for claims arising from the disputes and the state landlord-tenant case. Milrose and Ehrlich move to dismiss. (DE 17.)1 For the following reasons, the motion to dismiss is GRANTED IN PART and DENIED IN PART.
The allegations of the Complaint are assumed to be true for purposes of this motion. See Section II, infra.
Milrose owned an apartment building in New Jersey. (Compl. ¶ 7.) The Ojos signed a lease for a unit in that building in December 2017. (Id. ¶ 8.) Beginning in July 2019, Milrose failed to maintain the premises or correct a bed bug/vermin problem, and the Ojos repeatedly complained. (Id. ¶¶ 17-19.)
By December 2019, it became clear to the Ojos that Milrose would not respond, so they withheld rent for that month. (Id. ¶ 22.) In response, Milrose threatened to evict the Ojos, demanded rent exceeding the agreed-upon rent, and threatened to charge additional fees. (Id. ¶ 23.) Then, Milrose hired the Ehrlich law firm to initiate a summary dispossess action. (Id. ¶¶ 24-26.) The Ojos did not appear but instead paid the rent and vacated the premises, so the action was dismissed. (Id. ¶ 30; Filing at 1.)
The Ojos then sued Milrose and Ehrlich in this Court, asserting claims for (1) breach of contract, (2) wrongful ouster, (3) negligence in maintaining the apartment, (4) "refusal to repair the apartment" (a specific breach of contract), (5) conspiracy, (6) violations of the Fair Debt Collection Practice Act ("FDCPA"), 15 U.S.C. §§ 1692-1692o, and the New Jersey Consumer Fraud Act ("NJCFA"), N.J. Stat. Ann. § 56:8-1 et seq., and (7) violations of the Consumer Leasing Act ("CLA"), 15 U.S.C. §§ 1667 et seq., and the New Jersey Truth-in-Renting Act ("NJTIRA"), N.J. Stat. Ann. § 46:8-43 et seq. (Compl. ¶¶ 32-64.) The parties are not of diverse citizenship, so the Ojos rely on federal-question and supplementary jurisdiction. (Id. ¶¶ 2, 4-6.) Milrose and Ehrlich move to dismiss.
Federal Rule of Civil Procedure 8(a) does not require that a pleading contain detailed factual allegations but "more than labels and conclusions." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must raise a claimant's right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570. That standard is met when "factual content [] allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 12(b)(6) provides for the dismissal of a complaint if it fails to state a claim. The defendant bears the burden to show that no claim has been stated. Davis v. Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016). I accept facts in the complaint as true and draw reasonable inferences in the plaintiff's favor. Morrow v. Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (en banc).
This case is a landlord-tenant dispute, in which state law claims predominate; I state for the guidance of these pro se plaintiffs that, absent an independent basis for federal-court jurisdiction, such claims would ordinarily be filed in state court. I therefore assess first whether the federal FDCPA and CLA claims, which would be the only source of federal jurisdiction, are plausibly alleged. (Sections III.A, III.B) Because one such federal claim (the FDCPA claim) is sufficiently alleged, I then proceed to analyze the state-law causes of action. (Section III.C)
The Ojos assert a claim under the FDCPA.2
"The FDCPA protects against abusive debt collection practices by imposing restrictions and obligations on third-party debt collectors." Riccio v. Sentry Credit, Inc., 954 F.3d 582, 585 (3d Cir. 2020) (en banc). "To prevail on an FDCPA claim, a plaintiff must prove that (1) she is a consumer, (2) the defendant is a debt collector, (3) the defendant's challenged practice involves an attempt to collect a 'debt' as the [FDCPA] defines it, and (4) the defendant has violated a provision of the FDCPA in attempting to collect the debt." Barbato v. Greystone Alliance, LLC, 916 F.3d 260, 265 (3d Cir. 2019) (citation omitted).
Defendants do not dispute elements (1) and (3). (Mot. at 7.) The Ojos are consumers. 15 U.S.C. § 1692a(3) (). Unpaid rent is a debt. Rodriguez v. Maharaj, Civ. No. 20-04666, 2021 WL 508611, at *4 (D.N.J. Feb. 11, 2021) (collecting cases); see 15 U.S.C. § 1692a(5) (). So the remaining issues are elements (2) and (4): whether Milrose and Ehrlich are "debt collectors," and whether the Ojos have adequately alleged a violation of a section of the FDCPA.
Milrose is not a debt collector, but Ehrlich is.
"Debt collector" can mean any person "who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another." 15 U.S.C. § 1692a(6). "Creditors," defined in part as those "to whom a debt is owed," id. § 1692a(4), are not considered "debt collectors." Tepper v. Amos Fin., LLC, 898 F.3d 364, 366 (3d Cir. 2018). This is because the FDCPA is focused on "third party collection agents working for a debt owner—not on a debt owner seeking to collect debts for itself." Henson v. Santander Consumer USA Inc., 137 S. Ct. 1718, 1721 (2017). Accordingly, landlords, like Milrose, seeking to collect rent (a debt) owed directly to them from tenants are creditors, not debt collectors. Rodriguez, 2021 WL 508611, at *4. The FDCPA claim against Milrose will be dismissed.
Law firms acting on behalf of landlords, however, can qualify as debt collectors. Id. The Supreme Court has held that "a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings is a lawyer who regularly 'attempts' to 'collect' [] consumer debts" on behalf of a client. Heintz v. Jenkins, 514 U.S. 291, 294 (1995). Reasoning from Heintz, the New Jersey Supreme Court held that lawyers representing landlords in summary dispossess actions are debt collectors. Hodges v. Sasil Corp., 915 A.2d 1, 10 (N.J. 2007). The court explained that "the summary dispossess action is [] a powerful debt collection mechanism" and "designed to secure performance of the rental obligation." Id. (citation omitted). I am not bound by Hodges, which is a state supreme court ruling on a question of federal law. See Surrick v. Killion, 449 F.3d 520, 535 (3d Cir. 2006). I find Hodges persuasive, however, and federal courts in this District have uniformly adopted the holding of Hodges. Rodriguez, 2021 WL 508611, at *4; Livingstone v. Haddon Point Manager, LLC, Civ. No. 19-13412, 2020 WL 902218, at *5 (D.N.J. Feb. 25, 2020); Crenshaw v. Computex Info. Servs., Inc., Civ. No. 10-1493, 2011 WL 1640175, at *4-5 (D.N.J. Apr. 30, 2011).
Accordingly, I find that Ehrlich is adequately alleged to have acted as a debt collector when it represented Milrose in the summary dispossess action. Drawing inferences in the Ojos' favor, I can infer that summary dispossess actions are part of Ehrlich's practice, such that it "regularly" engages in that debt collection activity. 15 U.S.C. § 1692a(6); Hodges, 915 A.2d at 10. Thus, Ehrlich acted as a debt collector subject to the FDCPA.
The Ojos must also allege that Ehrlich violated one or more of the prohibitions contained in the FDCPA. Barbato, 916 F.3d at 265. The Complaint is not as specific as it might be, but because the Ojos appear pro se, I construe it liberally and "apply the applicable law, irrespective of whether the pro se litigant has mentioned it by name." Dluhos v. Strasberg, 321 F.3d 365, 369 (3d Cir. 2003); see also Rodriguez, 2021 WL 508611, at *5 (). In that process, I am aided by the Ojos' brief, which identifies four claimed FDCPA violations. (Opp. at 7.) I address each in turn, and find that two of them may be plausibly inferred from the complaint.
The Ojos allege that Ehrlich violated § 1692d, which provides that "[a] debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt." Generally, a nonfrivolous lawsuit alone does not qualify as harassing or abusive conduct. Shaw v. Hayt, Hayt & Landau, LLC, No. 20-cv-00115, 2021 WL 531961, at *9 (W.D. Pa. Feb. 12, 2021); Harvey v. Great Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir. 2006); see Gross v. Maitlin, 519 F. App'x 749, 751 (3d Cir. 2013) (per curiam) (). Here, Ehrlich had a valid reason for bringing a summary dispossess action—the Ojos had stopped paying rent. There may have been defenses to the state action, though the Ojos did not pursue them. Be that as it may, I cannot say that an action to recover rent that concededly was not paid crosses the line to harassment, oppression, or abuse. Thus, the Ojos fail to state a § 1692d claim.
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