Suarez v. Camden Prop. Tr.

• Decision Date: 08 September 2020
• Docket Number: No. 5:18-CV-455-D,5:18-CV-455-D
• Court: U.S. District Court — Eastern District of North Carolina
• Parties: JORGE SUAREZ, Plaintiff, v. CAMDEN PROPERTY TRUST, CAMDEN DEVELOPMENT, INC., and CSP COMMUNITY OWNER, LP, Defendants.

JORGE SUAREZ, Plaintiff, v. CAMDEN PROPERTY TRUST, CAMDEN DEVELOPMENT, INC.,and CSP COMMUNITY OWNER, LP, Defendants.

No. 5:18-CV-455-D

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NORTH CAROLINA WESTERN DIVISION

September 8, 2020

ORDER

On October 9, 2019, Jorge Suarez ("Suarez" or "plaintiff") moved to dismiss the breach of contract counterclaim of Camden Property Trust, Camden Development, Inc. ("Camden Development"), and CSP Community Owner, LP, f/k/a CSP Community Owner, LLC, d/b/a Camden Westwood ("Camden Westwood"; collectively, "defendants") [D.E. 40] and filed a memorandum in support [D.E. 41]. On November 20, 2019, defendants amended their breach of contract counterclaim [D.E. 46]. On December 13, 2019, Suarez moved to dismiss defendants' amended counterclaim [D.E. 47] and filed a memorandum in support [D.E. 48]. On January 3, 2020, defendants responded in opposition [D.E. 50]. On February 7, 2020, Suarez replied [D.E. 59]. As explained below, the court grants Suarez's motion to dismiss the amended counterclaim.

I.

The court discussed in detail Suarez's factual allegations and claims against defendants in the court's order granting in part and denying in part defendants' motion to dismiss Suarez's amended complaint for failure to state a claim, or for lack of subject-matter jurisdiction. See [D.E. 36]. In essence, after Suarez vacated his apartment at Camden Westwood Apartments, defendants sent a Final Account Statement (a "statement") to Suarez reflecting a balance of $147.76 owed to defendants. See id. at 2; Am. Compl. [D.E. 20] ¶¶ 21-22, 26. The statement stated that Suarez had 30 days to satisfy the balance before it was sent to a third-party collection agency, and that once sent to the collection agency, interest began accruing immediately. See [D.E. 36] 2; Ex. A. [D.E. 20-1]. Suarez paid $82.76 of the outstanding balance, but refused to pay a $55.00 "carpet stain removal" charge and a $10.00 key replacement charge. See [D.E. 36] 2; Am. Compl. at ¶¶ 26-29. Defendants then sent Suarez another statement reflecting a $65.00 outstanding balance (i.e., the "carpet stain removal" charge and the key replacement charge). That statement also said that Suarez had 10 days to satisfy the outstanding balance before it was sent to a third-party collection agency, after which interest would accrue. See [D.E. 36] 2-3. As for the first statement, Suarez contends that he fulfilled his obligations and did not owe the amounts defendants requested. As for the second statement, Suarez alleges that defendants' representations are deceptive. See id. at 2-3.

Defendants assert a breach of contract counterclaim against Suarez based on the rental agreement he signed concerning his apartment lease at Camden Westwood. See Ans. [D.E. 46] 16-18. Defendants allege that Suarez breached the terms of the rental agreement when he failed to pay the "carpet stain removal" charge and the key replacement charge. See id. The rental agreement states:

In the event that any damage or loss to Owner is caused by Resident, Occupants of the Unit or their respective guests or invitees (including contractors), Resident shall be liable for such damage or loss and shall immediately reimburse Owner for such damage or loss.

See id. at 17. The rental agreement also states:

[I]n the event Resident defaults under this Lease, Resident shall be liable to the fullest extent allowed by applicable law for . . . any court costs and reasonableattorneys' fees incurred by [Camden] Owner to enforce this Lease . . . .

See id. Defendants contend that the rental agreement required Suarez to return his keys to defendants, and that the rental agreement authorized defendants to charge Suarez a fee for carpet cleaning. See id. Because Suarez did not pay the "carpet stain removal" charge and the key replacement charge, defendants argue that Suarez breached the rental agreement. See id. at 18.

II.

A motion to dismiss under Rule 12(b)(1) tests subject-matter jurisdiction, which is the court's "statutory or constitutional power to adjudicate the case." Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 89 (1998) (emphasis omitted).¹ A federal court "must determine that it has subject-matter jurisdiction over [a claim] before it can pass on the merits of that [claim]." Constantine v. Rectors & Visitors of George Mason Univ., 411 F.3d 474, 479-80 (4th Cir. 2005). In making that determination, the court "may consider evidence outside the pleadings without converting the proceeding to one for summary judgment." Velasco v. Gov't of Indonesia, 370 F.3d 392, 398 (4th Cir. 2004); see Al Shimari v. CACI Premier Tech., Inc., 840 F.3d 147, 154 (4th Cir. 2016); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016); In re KBR, Inc. v. Burn Pit Litig., 744 F.3d 326, 333 (4th Cir. 2015); Williams v. United States, 50 F.3d 299, 304 (4th Cir. 2005) (noting that "the court may consider the evidence beyond the scope of the pleadingsto resolve factual disputes concerning jurisdiction."). If, however, "jurisdictional facts are inextricably intertwined with those central to the merits, the court should resolve the relevant factual disputes only after appropriate discovery." Kerns v. Williams, 585 F.3d 187, 193 (4th Cir. 2009); see Al Shimari, 840 F.3d at 154. Defendants, as the parties asserting that this court has subject-matter jurisdiction over the counterclaim, must prove that subject-matter jurisdiction exists. See, e.g., Steel Co., 523 U.S. at 103-04; Evans v. B.F. Perkins Co., 166 F.3d 642, 647 (4th Cir. 1999); Goldstar (Panama) S.A. v. United States, 967 F.2d 965, 967 (4th Cir. 1992); Richmond, Fredericksburg & Potomac R.R. v. United States, 945 F.2d 765, 768 (4th Cir. 1991).

The court does not have diversity or federal question jurisdiction over defendants' North Carolina state-law breach of contract counterclaim. Cf. 28 U.S.C. §§ 1331, 1332. Thus, the court must assess the counterclaim's status as "compulsory" or "permissive." If permissive, the court must determine whether the court has subject-matter jurisdiction over the counterclaim under 28 U.S.C. § 1367(a). See, e.g., Painter v. Harvey, 863 F.2d 329, 331 (4th Cir. 1988). The Fourth Circuit requires that a permissive counterclaim have its own "independent jurisdictional base." Id.; see Whigham v. Beneficial Fin. Co., 599 F.2d 1322, 1323 (4th Cir. 1979); Sue & Sam Mfg. Co. v. B-L-S Constr. Co., 538 F.2d 1048, 1051 (4th Cir. 1976). In contrast, a compulsory counterclaim need not have its own jurisdictional base. See Painter, 863 F.2d at 331; Sue & Sam Mfg. Co., 538 F.2d at 1051; see also Vanghan v. Recall Total Info. Mgmt., Inc., 217 F. App'x. 211, 223 n.18 (4th Cir. 2007) (per curiam) (unpublished); Peter Farrell Supercars, Inc. v. Monsen, 82 F. App'x. 293, 298 (4th Cir. 2003) (per curiam) (unpublished). Accordingly, the court first determines whether the counterclaim is compulsory or permissive.

A compulsory counterclaim "arises out of the transaction or occurrence that is the subject matter of the opposing party's claim." Fed. R. Civ. P. 13(a)(1)(A); see Painter, 863 F.2d at 332. Apermissive counterclaim is defined in the negative as "any claim that is not compulsory." Fed. R. Civ. P. 13(b). The Fourth Circuit has identified four questions to ask to help determine whether a counterclaim is compulsory:

(1) Are the issues of fact and law raised in the claim and counterclaim largely the same? (2) Would res judicata bar a subsequent suit on the parry's counterclaim, absent the compulsory counterclaim rule? (3) Will substantially the same evidence support or refute the claim as well as the counterclaim? and (4) Is there any logical relationship between the claim and counterclaim?

Painter, 863 F.2d at 331; see Equitrans, L.P. v. Moore, 725 F. App'x 221, 224 (4th Cir. 2018) (per curiam) (unpublished); Q Int'l Courier Inc. v. Smoak, 441 F.3d 214, 219 (4th Cir. 2006); Sue & Sam Mfg. Co., 538 F.2d at 1051-53. "[T]he res judicata test cannot be the controlling one." Painter, 863 F.3d at 333. These questions help focus the inquiry, but the court "need not answer all these questions in the affirmative for the counterclaim to be compulsory." Painter, 863 F.2d at 331; see Moore, 725 F. App'x at 224. Rather, a court should interpret the Rule "flexibl[y]" and "realistic[ally]" to achieve the Rule's purpose. Sue & Sam Mfg. Co., 538 F.2d at 1051.

The parties do not dispute the facts relevant to the jurisdictional analysis under Rule 12(b)(1). Accordingly, the court resolves the jurisdictional question without discovery. See Al Shimari, 840 F.3d at 154; Kerns, 585 F.3d at 193.

In his complaint, Suarez alleges a claim under the North Carolina Debt Collection Act ("NCDCA"), N.C. Gen. Stat. § 75-50, et seq. See Am. Compl. at ¶¶ 107-42. To prove a claim under the NCDCA, a party must demonstrate: (1) "the obligation owed" is a "debt"; (2) "the one owing the obligation" is a "consumer"; and (3) "the one trying to collect the obligation" is a "debt collector." Reid v. Ayers, 138 N.C. App. 261, 263, 531 S.E.2d 231, 233 (2000) (quotations omitted); see N.C. Gen. Stat. § 75-50(1)-(3); Davis Lake Cmty. Ass'n, Inc. v. Feldmann, 138 N.C. App. 292, 295, 530 S.E.2d 865, 868 (2000). If those requirements are met, plaintiff must furtherdemonstrate "(1) an unfair act (2) in or affecting commerce (3) proximately causing injury." Feldmann, 138 N.C. App. at 296, 530 S.E.2d at 868; see Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001); Spitzer-Tremblay v. Wells Fargo Bank, N.A., 250 N.C. App. 508, 793 S.E.2d 281, 2016 WL 6695825, at *4 (Nov. 15, 2016) (unpublished table decision).

To prove its breach of contract counterclaim, defendants must show: (1) the existence of a valid contract, and (2) breach of the terms of that contract. See McLamb v. T.P. Inc., 173 N.C. App. 586, 588, 619 S.E.2d 577, 580 (2005); Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000). A breach of a contract occurs where there is "[n]on-performan...