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Ford v. 1280 West Condominium Association, Inc.

United States District Court, N.D. Georgia, Atlanta Division

September 2, 2014



RICHARD W. STORY, District Judge.

This case comes before the Court on Defendants' Motion to Strike [37], the Association's Motion for Partial Summary Judgment on Its Counterclaim [38], Defendant Weibel's Motion to Dismiss [40], Defendants' Amended Motion for Judgment on the Pleadings [41], Plaintiffs' Motions to Strike [56, 59], Plaintiffs' Motion for Extension of Time to Complete Discovery [61], Plaintiffs' Cross-Motion for Summary Judgment [64], Defendant Paine's Motion to Dismiss [77], Plaintiffs' Motion for Preliminary Injunction [78], and Defendant 1280 West Condominium Association, Inc.'s Motion to Compel Discovery [81]. After reviewing the record, the Court enters the following Order.


I. Factual Background

Plaintiff Kimberly Ford and her mother, Plaintiff Mildred Robinson, purchased a condominium unit at 1280 West Condominiums on November 30, 2005. The 1280 West Condominium Association ("Association") is governed by a Declaration and Rules and Regulations which prohibit the leasing of condominium units unless the Association grants owners either a leasing permit or a hardship-leasing permit. (Declaration, Dkt. [1-3] at 8-9; Rules and Regs., Dkt. [14-2] at 26-37.) The number of leasing permits is limited to no more than 25% of the residential units at 1280 West Condominiums. (Id. at 9.) After encountering financial difficulties, Plaintiffs were granted hardship-leasing permits from September 13, 2011, through August 19, 2013. (Second Am. Compl., Dkt. [21] ¶ 10.) Plaintiffs requested a renewed permit on August 31, 2012, but Defendants denied their request some seven months later in March 2013. (Id. ¶¶ 10, 15.)

Plaintiffs further allege that their application was denied without an opportunity for a hearing with the Board of Directors in violation of the Declaration. (Id. ¶ 14.) After Plaintiffs requested a hearing, Defendants again denied their request for a permit in a letter dated April 3, 2013. (Id. ¶ 17.) In that letter, Defendants invited Plaintiffs to submit additional documentation to the Management Office for the Board of Directors' consideration. (Dkt. [1-2] at 16.) The letter also noted that the next opportunity for a private conference with the Board would be on April 24, 2013. (Id.) Plaintiffs refer to this conference as a Rule 19(b) hearing, citing the section in the Declaration governing dispute resolution which requires condominium owners to request and attend a hearing with the Board of Directors before filing any lawsuit against the Association, the Board, or any officer, director, or property manager of the Association. (See Declaration § 19(b), Dkt. [1-3] at 13.) Despite their repeated requests, Plaintiffs allege that they were never afforded a dispute-resolution hearing with the Board. (Second Am. Compl., Dkt. [21] ¶ 25.)

While Plaintiffs allege they complied with Defendants' application procedures, Plaintiffs state those procedures are more burdensome for African-Americans and women. (Second Am. Compl., Dkt. [21] ¶¶ 13, 59.) Plaintiffs also assert that "Defendants' policies, rules, and regulations... are being applied selectively in the terms, conditions, and privileges of rental[, ] thereby creating a disparate impact on protected classes of Owners." (Id. ¶ 60.) In support of these allegations, Plaintiffs say they have witnessed Defendants "issue multiple leasing permits to individual Owners of non-protected classes" even though Defendants denied Plaintiffs' permit and claimed that no permits were available. (Id. ¶ 50.) Plaintiffs further allege that while waiting to hear on a decision about their request for a renewed hardship-leasing permit, Defendants approved hardship-leasing permits for white male condominium owners. (Id. ¶ 56.)

Based on the foregoing allegations, Plaintiffs filed suit against 1280 West Condominium Association; the Association's management company, Beacon Management Services, LLC; property manager Lisa Weibel; Beacon employee Felicia Clift; and Martin Paine. Plaintiffs assert the following claims: (1) housing discrimination; (2) breach of contract; (3) intentional interference with potential economic advantage and business relations; (4) conspiracy to violate the Civil Rights Act of 1866, 42 U.S.C. § 1985; and (5) a combined claim for retaliation under the Civil Rights Act of 1866 and fraud.

II. 1280 West Condominium Association's Counterclaims

After Plaintiffs filed this action, the Association counterclaimed against Plaintiffs, requesting (1) a permanent injunction for covenant violations and breach of the condominium Declaration, (2) collection of unpaid fees, and (3) contractual attorneys' fees and expenses. (Answer, Dkt. [15] ¶¶ 38-64.) These counterclaims arise from Plaintiffs' attempt to lease their unit to Defendant Martin Paine and his girlfriend. After Defendants denied Plaintiffs another hardship-leasing permit, in early - Plaintiffs came into contact with Mr. Paine, a citizen of Australia who had recently taken a position as a post-doctoral research scholar at the Georgia Institute of Technology, and sent him a reservation application and lease agreement for Plaintiffs' condominium unit. (See Paine Decl., Dkt. [14-2] ¶¶ 2-3.)

Mr. Paine signed the lease on February 11, 2014, for a six-month term from February 19, 2014, until August 19, 2014. (Id. ¶ 4; Ex. B.) On March 7, 2014, after moving into the unit, Mr. Paine met with the Association's property managers upon learning that there was a problem with his application for an access card to the building's facilities. (Ass'n's Statement of Material Facts ("SMF"), Dkt. [38-2] ¶ 37.) The Association was not aware of Mr. Paine and Plaintiffs' arrangement until he provided them a copy of the lease, at which point the Association determined that Plaintiffs were leasing their unit in violation of the Declaration. (Id. ¶¶ 38-39.)

The Declaration permits the Association to levy fines for violations of its Rules and Regulations. (See Declaration, Dkt. [14-1] § 9(c), at 8.) On March 10, 2014, the Association sent Plaintiffs a notice that they were leasing their unit in violation of the Declaration and that the Board of Directors was assessing fines against them in the amount of $100 per day for leasing their unit without a permit, and an additional $100 per day for each day Plaintiffs allowed their tenants to access the condominium using Plaintiffs' access cards. (Ass'n's SMF, Dkt. [38-2] ¶¶ 47-49.) Furthermore, Plaintiffs allege that the Association suspended their access cards, thus denying them free access to all areas of the Association's facilities. (Second Am. Compl., Dkt. [21] ¶ 141.) The Association imposed the fines beginning on February 19, 2014, the first day of the lease term as reflected in the lease agreement. (Ass'n's SMF, Dkt. [38-2] ¶¶ 47-49.) Finally, the Association imposed a single $500 fine for advertising their unit for a lease term of less than one year in violation of the Declaration, which only allows owners to list, market, or advertise their units for terms over one year. (Id. ¶¶ 18, 53.) Based on these facts, the Association moves for partial summary judgment on its counterclaims.

III. Procedural Background

Plaintiffs initially filed this action against the Association and Beacon in the Superior Court of Fulton County. Defendants removed the case on February 21, 2014. Plaintiffs filed an Amended Complaint [19] on April 4, 2014, and a Second Amended Complaint [21] on April 7, 2014, which added Defendants Weibel, Clift, and Paine. The Court then denied Plaintiffs' Motion for Emergency Temporary Relief [2]. Defendants moved for a Rule 16 conference to determine the operative complaint in the case and also moved to strike Plaintiffs' Second Amended Complaint because Plaintiffs failed to seek leave to amend.

The Court granted Defendants' motion for a Rule 16 conference, which the Court held on June 3, 2014. (Minute Entry, Dkt. [74].) At that conference, the Court, in consultation with the parties, permitted Plaintiffs to proceed on their Second Amended Complaint. The Court also addressed confusion surrounding the numerous motions and responses filed in this case. In short, Plaintiffs moved to strike the Association's Motion for Judgment on the Pleadings [41] along with some of their own responses. By agreement of the parties, however, the Court will consider the Association's Motion for Judgment on the Pleadings [41], Plaintiffs' responses located at docket numbers [58] and [60], and Defendants' replies at docket numbers [71] and [72]. Also before the Court are the parties' cross motions for summary judgment on the Association's counterclaim [38, 64] and the Association's Motion to Compel Discovery [81].

Based on the consensus of the parties reached at the Rule 16 conference, Defendants' Motion to Strike [37] is DENIED, Plaintiffs' Motion to Strike Plaintiffs' Filing of Documents 19, 50, and 52 [56] is GRANTED, and Plaintiffs' Motion to Strike the Association's Motion for Judgment on the Pleadings [59] is DENIED. The Court now turns to the merits of the case.


I. Defendants Weibel and Paine's Motions to Dismiss [40, 77]

Both Defendants Weibel and Paine argue that they should be dismissed from this suit because, among other reasons, they were not served process in compliance with Federal Rule of Civil Procedure 4(m). "The plaintiff is responsible for having the summons and the complaint served within the time allowed under Rule 4(m)...." FED. R. CIV. P. 4(c)(1). Rule 4(m) provides:

If a defendant is not served within 120 days after the complaint is filed, the court-on motion or on its own after notice to the plaintiff-must dismiss the action without prejudice against that defendant or order that service be made within a specified time. But if the plaintiff shows good cause for the failure, the court must extend the time for service for an appropriate period.

FED. R. CIV. P. 4(m). When, as in this case, a plaintiff does not request waiver of service from an individual defendant pursuant to Rule 4(d), [1] the plaintiff is required to effect personal service on the defendant pursuant to Rule 4(e). Lepone-Dempsey v. Carroll Cnty. Comm'rs , 476 F.3d 1277, 1281 (11th Cir. 2007).

Under Rule 4(e), service of process on an individual in the Northern District of Georgia may be effected in one of four ways: first, by serving the defendant with process in accordance with Georgia law;[2] second, by delivering to the defendant personally a copy of the summons and complaint; third, by leaving a copy of each at the defendant's "dwelling or usual place of abode, " under certain conditions; or finally, by leaving a copy of each with an "agent authorized by appointment or by law to receive service of process." FED. R. CIV. P. 4(e).

Although Plaintiffs contend that they have properly served both Ms. Weibel and Mr. Paine, the Court can find no evidence of service in the record. There are two docket entries titled "Notice of Filing Summons" [51, 53] for both individuals, but they simply include copies of unsigned summonses. Plaintiffs also filed an "Electronic Summons" issued to both Ms. Weibel and Mr. Paine [55, 55-1], but each of those includes a completely blank Proof of Service. There is thus no evidence that Defendants were served personally, or waived service, in a method allowed by Rule 4. At the Rule 16 conference, Plaintiffs acknowledged there were issues with service of process and stated they would take steps to perfect service. Plaintiffs have failed to take any steps to cure the insufficient service of process, the 120-day time limit for service of process has lapsed, and Plaintiffs have failed to show good cause for their failure to effect sufficient service of process. Therefore, Defendants Weibel and Paine's Motions to Dismiss [40, 77] are hereby GRANTED.

II. 1280 West Condominium Association and Beacon's Amended Motion for Judgment on the Pleadings [41]

A. Legal Standard

After the pleadings are closed but within such time as not to delay trial, a party may file a motion for judgment on the pleadings. FED. R. CIV. P. 12(c). Judgment on the pleadings is appropriate only when no issues of material fact exist, and the movant is entitled to judgment as a matter of law. Ortega v. Christian , 85 F.3d 1521, 1524 (11th Cir. 1996). A court considers only the substance of the pleadings and any judicially noticed facts, and the court accepts the facts in the complaint as true and views them in the light most favorable to the nonmoving party. Hawthorne v. Mac Adjustment, Inc. , 140 F.3d 1367, 1370 (11th Cir. 1998). Thus, to survive a motion for judgment on the pleadings, "a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal , 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570 (2007)). A complaint is plausible on its face when the plaintiff pleads factual content necessary for the court to draw the reasonable inference that the defendant is liable for the conduct alleged. Id.

"The district court generally must convert a motion to dismiss into a motion for summary judgment if it considers materials outside the complaint." D.L. Day v. Taylor , 400 F.3d 1272, 1275-76 (11th Cir. 2005); see also FED. R. CIV. P. 12(d). However, documents attached to a complaint are considered part of the complaint. Fed.R.Civ.P. 10(c). Documents "need not be physically attached to a pleading to be incorporated by reference into it; if the document's contents are alleged in a complaint and no party questions those contents, [the court] may consider such a document, " provided it is central to the plaintiff's claim. D.L. Day , 400 F.3d at 1276. At the motion to dismiss phase, the Court may also consider "a document attached to a motion to dismiss... if the attached document is (1) central to the plaintiff's claim and (2) undisputed." Id . (citing Horsley v. Feldt , 304 F.3d 1125, 1134 (11th Cir. 2002)). "Undisputed' means that the authenticity of the document is not challenged." Id.

B. Analysis

1. Housing Discrimination

The Fair Housing Act ("FHA") prohibits "discriminat[ion] against any person in the terms, conditions, or privileges of sale or rental of a dwelling, or in the provision of services or facilities in connection therewith, because of race, religion, sex, familial status, or national origin." 42 U.S.C. § 3604(b). To establish a prima facie case of discrimination, Plaintiffs must show: (1) that they were members of a protected class under the FHA; (2) that they were qualified to receive a hardship-leasing permit; (3) that the permit was denied on the basis of their race or sex; and (4) that other similarly situated condominium owners of a non-protected class were granted hardship-leasing permits. See Sallion v. SunTrust Bank , 87 F.Supp.2d 1323, 1329 (N.D.Ga. 2000) (setting forth steps needed to prove a prima facie case of discrimination under the FHA). "A plaintiff can establish a [prima facie] violation under the FHA by proving (1) intentional discrimination[ or] (2) discriminatory impact...." Bonasera v. City of Norcross , 342 F.App'x 581, 583 (11th Cir. 2009) (citing Schwarz v. City of Treasure Island , 544 F.3d 1201 (11th Cir. 2008); Hallmark Developers, Inc. v. Fulton County, Ga. , 466 F.3d 1276 (11th Cir. 2006)).

Defendants contend that Plaintiffs fail to show either disparate treatment or disparate impact. Plaintiffs concede that the Declaration as written does not discriminate or disproportionately affect African-Americans and females. (See Pls.' Resp., Dkt. [60] at 10-11.) However, Plaintiffs emphasize that Defendants' actions described in the Background section-namely, selectively enforcing the Declaration against them but not white condominium ...

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