Zehm v. Morgan Props., Moorestowne Woods Apartment Assocs., LLC
| Decision Date | 27 October 2017 |
| Docket Number | 1:17-cv-1758 (NLH/KMW) |
| Parties | AVA ZEHM, individually and on behalf of others similarly situated, Plaintiff, v. MORGAN PROPERTIES, MOORESTOWNE WOODS APARTMENT ASSOCIATES, LLC d/b/a MOORESTOWNE WOODS APARTMENT ASSOCIATES, LP, and NWP SERVICES CORPORATION, Defendants. |
| Court | U.S. District Court — District of New Jersey |
LEWIS G. ADLER
LAW OFFICE OF LEWIS ADLER
WOODBURY, NJ 08096
On behalf of Plaintiff
PAUL DEPETRIS
LAW OFFICE OF PAUL DEPETRIS
CHERRY HILL, NJ 08002
On behalf of Plaintiff
RACHEL C. HEINRICH
DANIEL S. BERNHEIM
WILENTZ GOLDMAN & SPITZER, P.A.
TWO PENN CENTER
SUITE 910
On behalf of Defendants Morgan Properties Management Company, LLC and Moorestowne Woods Apartment Associates, LLC
ORLOFF LOWENBACH STIFELMAN & SIEGEL PA
SUITE 400
ROSELAND, NJ 07068
On behalf of Defendant NWP Services Corporation
JAIKARAN SINGH
DENTONS US LLP
4655 EXECUTIVE DRIVE, SUITE 700
On behalf of Defendant NWP Services Corporation
This purported class action predominantly concerns two allegedly illegal provisions of a residential lease: an attorneys' fees provision and a utility addendum regarding the allocation of water charges. Plaintiff contends these provisions violate the New Jersey Consumer Fraud Act ("CFA") and the New Jersey Truth in Renting Act ("TRA"). Defendants Morgan Properties Management Company, LLC ("Morgan Properties") and Moorestown Woods Apartment Associates, LLC ("MWAA") (collectively "the Morgan Defendants") request this Court stay the counts that pertain to the attorneys' fees provision and request dismissal of the counts that pertain to the utility addendum.2 Defendant NWP Services Corporation ("NWP") alsorequests dismissal of the claims against it, all of which pertain to the utility addendum.
For the reasons that follow, the Court will deny the Morgan Defendants' motion for partial abstention and will grant the Morgan Defendants' motion for partial dismissal of the complaint. The Court will grant NWP's motion to dismiss as well. The Court will not grant Plaintiff leave to amend the complaint, finding such an amendment would be futile.
The Court takes its facts from Plaintiff's January 18, 2017 complaint, filed in the New Jersey Superior Court, Law Division ("Law Division"). Plaintiff lived in an apartment in Moorestown owned by MWAA. The complex consisted of approximately 172 residential units and was managed by Morgan Properties. Plaintiff executed her first lease with MWAA in 2014 for the rental of an apartment. Plaintiff renewed her lease in 2015.
As part of her leases, Plaintiff signed a utility addendum, which provided that charges for water would be based on the number of bedrooms in each resident's apartment unit. NWP was the third-party billing service provider for this utility. Plaintiff's leases also contained a provision that stated, in pertinent part, that with regard to a breach of the lease, if an attorney is employed, including in-house counsel, the resident was required to pay $400 in attorneys' fees. That amount couldbe reduced to $200 "in the event an eviction action is filed . . . for non-payment of rent, and [the tenant] pay[s] all rent due."3
The Morgan Defendants filed a complaint in January 2016 against Plaintiff for rent due. The complaint declared $873.85 due and owing: $331.65 for rent due, a $142.20 late charge, and $400 in attorneys' fees.
Following that litigation, Plaintiff filed a class action complaint against Defendants, which was removed to federal court on March 15, 2017.4 The complaint alleged:
The Morgan Defendants filed an April 5, 2017 motion for partial abstention and partial dismissal of the complaint. NWP then filed an April 26, 2017 motion to dismiss.
The Morgan Defendants ask this Court to stay Counts One, Three, Four, and, in part, Count Seven6 of this action under the Colorado River abstention doctrine, arguing there is similar litigation pending in state court.7 The matter Green v. MorganProperties, pending in the Law Division,8 is another purported class action. The gravamen of both actions is that the attorneys' fees provision allows the Morgan Defendants to recover an unreasonable and excessive amount of attorneys' fees, which do not reflect the actual time spent on eviction matters.
The Green plaintiffs brought claims for unlawful eviction proceedings under N.J.S.A. 2A:18-61.6, consumer fraud, and negligence. On February 4, 2011, the Law Division dismissed the plaintiffs' complaint with prejudice, finding it failed to state a claim upon which relief may be granted. Green v. Morgan Props., No. 4158-10, 2011 WL 7986626 (N.J. Super. Ct. Law Div. Feb. 4, 2011), rev'd, No. 4158-10, 2011 WL 5212388 (N.J. Super. Ct. App. Div. Nov. 3, 2011), aff'd in part, rev'd in part, 73 A.3d 478 (N.J. 2013).
On appeal, the Appellate Division reversed, finding there to be "a cause of action based on plaintiffs' allegation that the landlords have imposed charges on their tenants, denominatedas attorney's fees, that exceed the landlords' actual cost for in-house legal representation." Green, 2011 WL 5212388, at *1. The Appellate Division found the plaintiffs thus stated a claim under the CFA. Id. The New Jersey Supreme Court affirmed, as related to the corporate defendants, that the CFA claim survived a motion to dismiss, but found the count was properly dismissed as to the individual defendant. Green, 73 A.3d at 493. The case was then remanded to the Law Division.
According to the Morgan Defendants' counsel's certification, on December 7, 2015, the Green plaintiffs filed a motion for partial summary judgment and motion for class certification in the Law Division. Both were denied. The plaintiffs then filed a petition for interlocutory appeal in the Appellate Division, which was granted as to the Law Divison's denial of class certification. In September 2017, the Appellate Division found a narrowed class would be appropriate and remanded back to the Law Division. Green, 2017 WL 4171613, at *10. With this background, the Court now addresses whether this is an appropriate case for application of Colorado River abstention.
Whether abstention is appropriate is a two-part inquiry. The initial question is whether there is a parallel state proceeding that raises "substantially identical claims [and] nearly identical allegations and issues." If the proceedings are parallel, courts then look to a multi-factor test to determine whether "extraordinary circumstances" meriting abstention are present.
Nationwide Mut. Fire Ins. Co. v. George V. Hamilton, Inc., 571 F.3d 299, 307-08 (3d Cir. 2009) (alteration in original) (first quoting Yang v. Tsui, 416 F.3d 199, 204 n.5 (3d Cir. 2005); and then quoting Spring City Corp. v. Am. Bldgs. Co., 193 F.3d 165, 171 (3d Cir. 1999)). "The doctrine is to be narrowly applied in light of the general principle that 'federal courts have a strict duty to exercise the jurisdiction that is conferred upon them by Congress.'" Id. at 307 (quoting Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 717 (1996)).
The Court first looks to whether the federal and state cases are parallel. See, e.g., Trent, 33 F.3d at 223. "Generally, cases are parallel so as to justify abstention under Colorado River when they involve the same parties and claims." Id. However, the Third Circuit has applied Colorado River abstention even where the parties were not "perfectly identical," but were "substantially the same." Barron v. Caterpillar, Inc., No. 95-5149, 1996 WL 368335, at *2 n.2 (E.D. Pa. June 26, 1996); accord Mamouzette v. Jerome, No. 13-117, 2017 WL 3083628, at *8 (D.V.I. July 19, 2017) ( ); Glades Pharm., LLC v. Call, Inc., No.04-4259, 2005 WL 563726, at *7 (E.D. Pa. Mar. 9, 2005) ().
In this federal court action, Plaintiff is Zehm, both individually and on behalf of others similarly situated. The Defendants are Morgan Properties, MWAA, and NWP. In the state court action, the plaintiffs are Darnice Green, Mathew Blumberg, Michael Permenter, and Beth Permenter, both individually and on behalf of others similarly situated. The state court plaintiffs attempted to define the class as follows:
1) Individuals who have resided in the six years prior to the filing of the complaint in any of the properties managed or owned by the Morgan and East Coast Defendants; and 2) who were charged attorneys fees and/or other costs which were in excess of the amount actually incurred and/or in excess of the amount allowed by law.9
The defendants in the state court action are Morgan Properties, Morgan Management Mitchell L. Morgan, Inc., Rosemary Spohn, East Coast The Willows, LLC, and East Coast Colonial Apartments, LLC.
In a class action, "'[e]xact parallelism' is not required," particularly "where the interests of both the named plaintiffs and the identical putative classes they seek to represent are congruent, notwithstanding...
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