Pleznac v. Equity Residential Mgmt., L.L.C., Case No. 17-cv-2732 (CRC)

• Decision Date: 08 August 2018
• Docket Number: Case No. 17-cv-2732 (CRC)
• Parties: Sarah S. PLEZNAC, Plaintiff, v. EQUITY RESIDENTIAL MANAGEMENT, L.L.C., Defendant.
• Court: U.S. District Court — District of Columbia

320 F.Supp.3d 99

Sarah S. PLEZNAC, Plaintiff,

v.EQUITY RESIDENTIAL MANAGEMENT, L.L.C., Defendant.

Case No. 17-cv-2732 (CRC)

United States District Court, District of Columbia.

Signed August 8, 2018

Jamil Zouaoui, Mizene PLLC, Washington, DC, for Plaintiff.

Craig M. White, Baker & Hostetler LLP, Chicago, IL, Carey S. Busen, Baker & Hostetler, LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge

In September 2017, plaintiff Sarah Pleznac filed this putative class action against her former landlord, Equity Residential Management, L.L.C. The gist of Pleznac's complaint is that Equity perpetrated a "bait-and-switch" scheme that fooled her and other tenants into paying higher rents than they expected, and that it retaliated against her for complaining about its practices. Equity seeks to dismiss all of Pleznac's claims under Federal Rule of Civil Procedure 12(b)(6), contending that she has failed to adequately plead several of her claims and that others are time-barred. The Court will grant Equity's motion with respect to some of Pleznac's claims and deny it for others.

I. Background

Equity is an S & P 500 company that owns and manages hundreds of apartment buildings around the country, including several in the District of Columbia. Ms. Pleznac lived in one of its D.C. properties, 3003 Van Ness, from 2013 to 2017. According to Pleznac, Equity's scheme unfolded as follows: Sometime in January 2013, she saw an apartment advertised at 3003 Van Ness for $1,693 per month. Interested, Pleznac contacted Equity's rental office and applied to lease the apartment. Equity drew up a lease and told her that the District's rent-control statute applied to the property, meaning that rent could only rise by the amount of the increase in the Consumer Price Index ("CPI") plus an additional two percentage points. Pleznac signed the lease and moved in.

But Pleznac claims that, throughout this process, Equity obfuscated that the advertised rent was heavily discounted: the lease included a so-called "rent concession" of some $1,000 per month from the "base rate." To Pleznac's apparent surprise, when her yearlong lease was set to expire, she was notified that her rent would rise by 2% over the CPI multiplied by the higher base rate—not by the lower discounted rate—resulting in a significant hike. Equity then used the threat of that higher rent—combined with the "great expense and inconvenience" of moving after just one year—to "coerce[ ]" her to sign several subsequent one-year leases with rents higher than she expected when she signed the initial lease. Notice of Removal Ex. A ("Compl."), ECF No. 1, ¶ 52. She alleges that Equity treated thousands of its tenants similarly.

Pleznac claims that Equity's practices violated the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C. Code § 28-3904, and amounted to a breach of contract, intentional infliction of emotional distress, and fraud. She also alleges that, when she and other tenants complained about Equity's practices, the company retaliated by filing frivolous lawsuits against them for nonpayment of rent. It would also report false information to credit reporting agencies—including that the tenant had been evicted and that she owed Equity overdue rent—and then refuse to correct those knowingly false reports after tenants contested them. In Pleznac's view, these suits against tenants amounted to malicious prosecution. And the false reports to credit agencies were both defamatory and contrary to the Fair Credit Reporting Act, a federal statute that requires entities that relay information to consumer reporting agencies to diligently investigate disputed credit-related information and promptly correct any errors, see 15 U.S.C. § 1681s-2.

Pleznac initially filed suit in D.C. Superior Court, but Equity removed the case to federal court. The Court upheld the removal over Pleznac's objection, finding that the case was removable under the Class Action Fairness Act because it involved over 100 potential class members and put at least $5 million at issue. Op. & Order, ECF No. 19, at 4–5 (May 8, 2018). Equity has now moved to dismiss all of Pleznac's claims on various grounds pursuant to Federal Rule of Civil Procedure 12(b)(6).

II. Legal Standard

To survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. at 556, 127 S.Ct. 1955.

III. Analysis

A. CPPA and Fraud (Counts 1, 7, 8, and 9)

Equity seeks to dismiss Pleznac's CPPA and fraud claims on the basis that they are untimely. The Court agrees that dismissal of these claims is proper.

Under D.C. law, a plaintiff must bring a claim under the CPPA or for fraud within three years from the time when her right to maintain the action accrues. See D.C. Code § 12-301(8) ; Bradford v. George Washington University, 249 F.Supp.3d 325, 335 (D.D.C. 2017). A claim accrues when the plaintiff has "actual notice of her cause of action." Medhin v. Hailu, 26 A.3d 307, 310 (D.C. 2011). Pleznac admits that she had notice of Equity's allegedly deceptive actions when it presented her with a notice in September 2013 showing what her rent would be if she renewed her initial lease. Equity straightforwardly contends that, because that date was more than three years before Pleznac filed her complaint in September 2017, her claims are time-barred.

Pleznac insists, however, that her claims remain viable because Equity committed a "continuing tort" against her, which included some tortious acts within the limitations period. The continuing tort doctrine allows recovery for extended harms that began outside of the applicable limitations period. Under District of Columbia law, the doctrine applies only where a plaintiff suffers "(1) a continuous and repetitious wrong, (2) with damages flowing from the act as a whole rather than from each individual act, and (3) at least one injurious act ... within the limitation period." Beard v. Edmondson & Gallagher, 790 A.2d 541, 547–48 (D.C. 2002).

Pleznac's reliance on the continuing tort doctrine is misplaced. The doctrine applies only where the claimed "injury might not have come about but for the entire course of conduct ." John McShain, Inc. v. L'Enfant Plaza Props., Inc., 402 A.2d 1222, 1231 n.20 (D.C. 1979) (emphasis added). For example, D.C. courts have held that certain subterranean encroachments onto someone else's land are "continuous," such that a plaintiff can seek redress for any damage caused by the encroachment within the limitations period even if he first became aware of the encroachment outside of the limitations period. L'Enfant Plaza East, Inc. v. John McShain, Inc., 359 A.2d 5, 6 (D.C. 1976). But that sort of case is a rare exception to the general rule that, when a plaintiff suffers an identifiable legal wrong and experiences "[a]ny appreciable and actual harm flowing from the [defendant's] conduct," her claim accrues at that moment. Beard, 790 A.2d at 546 (alterations in original) (quoting Hendel v. World Plan Exec. Council, 705 A.2d 656, 661 (D.C. 1997) ). The fact that an injury continues into the limitations period—or even that new and unexpected injuries arise—does not allow her to sue for the initial wrong that occurred outside the limitations period. This is why the D.C. Court of Appeals has held that claims based on alleged sexual abuse accrue when a plaintiff is first aware of the fact of abuse, not when he later "appreciated the full impact of [the alleged] misconduct." See Cevenini v. Archbishop of Wash., 707 A.2d 768, 772 (D.C. 1998). And why it has explained that medical malpractice claims ripen when a plaintiff first becomes aware of cancer

caused by a doctor's alleged negligence, not when the cancer later metastasizes and creates more catastrophic harm. Colbert v. Georgetown Univ., 641 A.2d 469, 475–76 (D.C. 1994) (en banc).

In other words, the continuing tort doctrine does not mean "that accrual should be tolled until the plaintiff fully appreciates the ‘impact’ of the harm directed at him." Cevenini, 707 A.2d at 772. Rather, "once the plaintiff has been placed on notice of an injury and the role of the defendants' wrongful conduct in causing it, the policy disfavoring stale claims makes application of the ‘continuous tort’ doctrine inappropriate." Hendel, 705 A.2d at 667.

All of this is to say that the doctrine is inapplicable to Pleznac's CPPA and fraud claims. There is no way to read her complaint as alleging harm that materialized only through Equity's course of conduct as a whole. Quite the contrary, the nature of her claims show that she seeks redress for discrete, identifiable instances of alleged deception with continuing consequences. See Wallace v. Skadden, Arps, Meagher & Flom, 715 A.2d 873, 882 (D.C. 1998) (rejecting that multiple "defamatory statements were all part of a single continuing course of conduct," even where plaintiff alleged that the statements "cumulatively led to her discharge from employment"). Specifically, Pleznac claims that Equity violated the CPPA by:

• misrepresenting or failing to state a material fact—i.e. , the actual rent being charged;• advertising or offering apartments without the intent to sell them as advertised;

• making a misleading representation concerning the reasons for its price reductions or the price in comparison to its own price at a past or future time;

• falsely stating the reasons for offering or supplying the rent discount; and

• making or enforcing unconscionable lease terms.

Compl. ¶ 73. Similarly, Pleznac's fraud claims rest on allegations that Equity fraudulently induced her into signing a lease (Count 7); fraudulently concealed...