Ruiz v. Millennium Square Residential Ass'n

• Decision Date: 11 June 2020
• Docket Number: Case No. 1:19-cv-03765 (TNM)
• Parties: Julio Lamboy RUIZ, Plaintiff, v. MILLENNIUM SQUARE RESIDENTIAL ASSOCIATION, et al., Defendants.
• Court: U.S. District Court — District of Columbia

466 F.Supp.3d 162

Julio Lamboy RUIZ, Plaintiff,

v.MILLENNIUM SQUARE RESIDENTIAL ASSOCIATION, et al., Defendants.

Case No. 1:19-cv-03765 (TNM)

United States District Court, District of Columbia.

Signed June 11, 2020

Zachary Chapman, Jackson & Campbell, P.C., Washington, DC, Christopher Allan Glaser, Jackson & Campbell, P.C., DC, for Plaintiff.

April Hope Gassler, Sperduto Thompson & Gassler PLC, Washington, DC, Mariam Wagih Tadros, Rees Broome, PC, Tysons Corner, VA, for Defendant Millennium Square Residential Association.

April Hope Gassler, Sperduto Thompson & Gassler PLC, Washington, DC, for Defendants Millennium Square Unit Owners Association, Millennium Square Commercial Association.

James K. Howard, Robert Lawrence Ferguson, Jr., Ferguson, Schetelich & Ballew, P.A., Baltimore, MD, for Defendant Ritz-Carlton Hotel Company, LLC.

MEMORANDUM OPINION

TREVOR N. McFADDEN, U.S.D.J.

Last year, Julio Lamboy Ruiz discovered significant water damage inside the walls of his condominium unit. This damage, he believes, was caused by the building's chilled water equipment and pipes, which the Millennium Square Condominium Associations¹ ("Millennium Defendants") and the site manager—Ritz-Carlton Hotel Company ("Ritz-Carlton" or "Hotel")—improperly installed, repaired, or maintained. He sued the Millennium Defendants and Ritz-Carlton seeking compensation for damage to his property.

Defendants moved to dismiss or compel arbitration. Ruiz now admits that his claims against the Millennium Defendants should go to arbitration, though he urges this Court to stay rather than dismiss the case. Still, he maintains that he has stated a claim for negligence against Ritz-Carlton and he insists that the Court should not compel arbitration of that claim.

The Court agrees with Ruiz that his Amended Complaint has stated a valid claim for negligence. But because this negligence claim is intertwined with Ruiz's claims against the Millennium Defendants, the Court will compel Ruiz to arbitrate this claim with Ritz-Carlton. While arbitration is pending, the Court will stay proceedings against all Defendants.

I. BACKGROUND

Ruiz owns a condominium unit within the Millennium Square condominium project ("Condominium") in Washington, D.C. See Am. Compl. ¶¶ 2–3, ECF No. 18. The Condominium is a "mixed-use" condominium with residential units, like the one owned by Ruiz, and commercial units, operated by Ritz-Carlton. Id. ¶¶ 5, 10.

The top floor of Ruiz's unit is adjacent to the Condominium's mechanical facilities room. Id. ¶ 14. Ruiz alleges that last year, some chilled water equipment in the mechanical room entered a "blowdown or flushing mode" which caused the room's floor drain to overflow. Id. ¶ 15. This overflow caused about 20–30 gallons of water to infiltrate Ruiz's unit. Id.

A few days later, Ruiz discovered mold and water in his unit. Id. ¶ 16. Over the next two months, he had several portions of the ceilings and walls opened and discovered that the insulation surrounding the pipes was "heavily waterlogged," caused by "excessive condensation of the pipes." Id. ¶¶ 17–20 (capitalization altered).

The water caused more than $575,000 of damage to Ruiz's property. Id. ¶ 29. Ruiz claims the Millennium Defendants and Ritz-Carlton caused these damages through the "erroneous operation of the chilled water system ... and/or [ ] faulty insulation and/or the faulty installation and/or maintenance of the insulation and/or piping." Id. ¶ 21.

Ruiz suggests that the Condominium Bylaws obligated the Millennium Defendants to maintain the chilled water system, insulation, and pipes. The Bylaws "govern the respective rights and obligations" between Ruiz and the Millennium Defendants. Id. ¶ 22. And they allocate responsibilities for the "maintenance, repair and replacement" of the Condominium's "Common Elements." Id. ¶ 23. According to the Bylaws, the Unit Owners Association is responsible for the "General Common Elements," the Residential Association is responsible for the "Residential Limited Common Elements," and the Commercial Association is responsible for the "Commercial Limited Common Elements." Id. "Despite investigation," Ruiz was unable to determine to what category of elements the water chilling equipment and pipes belong. Id. ¶ 26. And Defendants’ representatives have provided Ruiz with "conflicting information ... regarding the operation, control, maintenance, and/or responsibilities of the facilities and instrumentality at issue in this litigation[.]" Id. ¶ 25.

Ruiz also faults Ritz-Carlton. He alleges that it "assumed certain maintenance and repair responsibilities" that "obligate the Hotel to maintain, repair and replace the facilities and instrumentalities at issue in this litigation including, but not limited to, the Pipes." Id. ¶ 27. Ritz-Carlton and the Commercial Association have a Management Agreement that gives the Hotel the responsibility to "cause the Common Elements of the Condominium to be repaired, restored, cleaned, added to, improved, altered, replaced or maintained in such condition as may be required by ... the Bylaws."² See Ritz-Carlton Mot. to Dismiss 13 ("Ritz Mot."), ECF No. 22-2; Management Agreement 4, Ritz Mot., Ex. A, ECF No. 22-3.³

Ruiz sued the Millennium Defendants for violating the D.C. Consumer Protection Procedures Act, breach of the bylaws, breach of the implied duty of good faith and fair dealing, and negligence. Am. Compl. ¶¶ 31–53. He also sued the Hotel for negligence. Id. ¶¶ 48–53.

The Millennium Defendants moved to compel arbitration or, in the alternative, to dismiss. See Millennium Mot. to Compel, or, Mot. to Dismiss ("Millennium Mot."), ECF No. 19-1. In response, Ruiz admitted that arbitration is required for all claims against these Defendants.⁴ See Ruiz Resp. to Millennium's Mot. to Compel 1 ("Ruiz Millennium Resp."), ECF No. 24. Ritz-Carlton also moved to dismiss or, in the alternative, to compel arbitration. See Ritz Mot. at 4. These motions are ripe for the Court's review.

The Court has diversity jurisdiction over this case, since Ruiz is a citizen of North Carolina, Millennium Defendants are incorporated in the District of Columbia, and Ritz-Carlton is a Delaware limited liability company with its principal place of business in Maryland. See Am. Compl. ¶¶ 1–11; 28 U.S.C. § 1332. The amount in controversy exceeds $75,000. Am. Compl. ¶¶ 11, 29.

II. STANDARD OF REVIEW

To survive a motion to dismiss, a complaint must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). The plaintiff must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id.

In assessing plausibility, the Court may consider only "the facts alleged in the complaint, any documents either attached to or incorporated in the complaint and matters of which [it] may take judicial notice." Hurd v. District of Columbia , 864 F.3d 671, 678 (D.C. Cir. 2017) (internal quotations omitted). And it must generally "accept as true all of the complaint's factual allegations and draw all reasonable inferences in favor of the plaintiff[ ]." Owens v. BNP Paribas, S.A. , 897 F.3d 266, 272 (D.C. Cir. 2018). But a complaint containing only "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements" and factually void legal conclusions cannot withstand a motion to dismiss. Iqbal , 556 U.S. at 678–79, 129 S.Ct. 1937.

Courts evaluate motions to compel arbitration under Federal Rule of Civil Procedure 56(c). See Aliron Int'l, Inc. v. Cherokee Nation Indus., Inc. , 531 F.3d 863, 865 (D.C. Cir. 2008). The party seeking to compel arbitration must first present "evidence sufficient to demonstrate an enforceable agreement to arbitrate." Hill v. Wackenhut Servs. Int'l , 865 F. Supp. 2d 84, 89 (D.D.C. 2012) (internal quotations omitted). Then the burden shifts to the non-moving party "to raise a genuine issue of material fact as to the making of the agreement, using evidence comparable to that identified in Fed. R. Civ. P. 56." Id. (cleaned up). "The Court will compel arbitration if the pleadings and the evidence show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fox v. Comput. World Servs. Corp. , 920 F. Supp. 2d 90, 96 (D.D.C. 2013) (cleaned up).

III. ANALYSIS

A. Ritz-Carlton's Motion to Dismiss

To plead negligence against the Hotel, Ruiz must allege facts showing that (1) Ritz-Carlton owed a duty to him; (2) it breached that duty; and (3) Ruiz's injury was proximately caused by the breach. See Hedgepeth v. Whitman Walker Clinic , 22 A.3d 789, 793 (D.C. 2011). Ritz-Carlton urges three justifications for dismissal. First, it suggests that Ruiz failed to plead that it owed Ruiz any duty. See Ritz Mot. at 9–16. Second, Ritz-Carlton challenges Ruiz's pleading of breach. Id. at 11. Finally, it claims that Ruiz's negligence claim is barred by the economic loss doctrine. Id. at 16–17.

1. Ruiz pleaded that Ritz-Carlton owed him a duty of care.

Ritz-Carlton suggests that Ruiz failed to sufficiently plead that it owed him a duty, both because Ruiz "fails to characterize the specific legal duty owed to him" and because it "owes him no duty as a matter of law." Ritz Mot. at 10–12. The Court disagrees on both fronts.

To begin, Ruiz does characterize Ritz-Carlton's legal duty in his Amended Complaint. It alleges that the Hotel "assumed certain maintenance and repair responsibilities that it knew or should have known would directly impact the Plaintiff which such assumed responsibilities obligate the Hotel to maintain, repair and replace the facilities and instrumentalities at issue in this litigation including, but not limited to, the Pipes." Am. Compl. ¶ 27. In other words, the Amended Complaint alleges that Ritz-Carlton voluntarily undertook maintenance and repair responsibilities for the pipes and other chilled...