Affidavit ), as well as Joseph Clark s Supplemental Affidavit ( Clark Supplemental

Transcription

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2 Affidavit ), as well as Joseph Clark s Supplemental Affidavit ( Clark Supplemental Affidavit ). 1 While Plaintiffs will refute Defendants arguments in detail, a key point with regard to class certification is the same as for summary judgment: tenants have a right to a legal lease, a lease free of provisions prohibited under the Iowa Landlord Tenant statute, Chapter 562A. All tenants with standard leases have had this right infringed in almost identical fashion by Landlord, in particular with regard to automatic cleaning fees, common area damages and indemnification clauses. Landlord may compound this original illegality by going further and acting in accordance with its illegal lease provisions, but it is not necessary in order to impose liability, for example, for Landlord to have actually initiated indemnification suits. Chapter 562A is clear that the mere inclusion of illegal provisions in a lease violates the rights of tenants and damages them, 1. A rental agreement shall not provide that the tenant or landlord: a. Agrees to waive or to forego rights or remedies under this chapter d. Agrees to the exculpation or limitation of any liability of the other party arising under law or to indemnify the other party for that liability or the costs connected therewith. 2. A provision prohibited by subsection 1 included in a rental agreement is unenforceable. If a landlord willfully uses a rental agreement containing provisions known by the landlord to be prohibited, a tenant may recover actual damages sustained by the tenant and not more than three months' periodic rent and reasonable attorney's fees. Iowa Code 562A.11. When considering certifying a class, the court does not need to find that the Plaintiffs will ultimately prevail on the merits, instead it makes a threshold factual 1 Defendants also filed a Request for Hearing with regard to Plaintiffs Application for Certification as a Class Action, but this is moot as this Court on May 12, 2011 granted an unresisted motion for a joint hearing on both Plaintiffs summary judgment and class certification motions, with the joint hearing to be set in July. 2

3 inquiry. Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741, 745 (Iowa 1985). Plaintiffs have, therefore, considerably exceeded this standard with regard to automatic cleaning fees, common area damages and indemnification clauses since these are the subject of summary judgment on the grounds that their inclusion in Landlord s leases as well as actual implementation are illegal. Plaintiffs have set forth their arguments on these issues at length in their Amended and Substituted Motion for Partial Summary Judgement ( Summary Judgment Motion ) and Reply to Defendants Resistance to Summary Judgment. In their resistances, Defendants implicitly accept that automatic cleaning fees, common area damage charges and indemnification clauses are illegal, because they make no specific points or argument defending their legality. Apparently Defendants argument is that either the plain language of their leases should be ignored or illegal lease clauses are acceptable, so long as Landlord claims they do not act in accordance with their own leases. The Defendants most important argument with regard to class certification rests on the issue of whether or not the proposed class has a joint interest. Defendants assert that there are major factual differences between the plaintiffs and the class members and that individual questions of law and fact therefore predominate. There can be no doubt that each of the individual plaintiffs and class members inevitably has a somewhat different fact pattern with regard to their complete interactions with Landlord. One may have signed their lease on a Tuesday, while the other signed on a Wednesday, one may have had problems with their sink, while the other was unhappy 3

4 with the heat in their apartment. However, if absolute unanimity of all facts was required, no class action could ever be maintained. Instead, what the law requires is that the proposed class representatives and the class as a whole or subclasses share one or more common complaints, The individual claims need not be carbon copies of each other. [Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741, 745 (Iowa 1985)]. If a"common nucleus of operative facts" is present, a class action can be brought even without a"complete identity of facts relating to all class members." Id. (quoting 7A C. Wright & A. Miller, Federal Practice and Procedure 1778, at ))."`Predominate' should not be automatically equated with `determinative' or `significant.'" Id."A claim will meet the predominance requirement when there exists generalized evidence which proves or disproves an element on a simultaneous, class-wide basis, since such proof obviates the need to examine each class member's individual position." Cope v. Metro. Life Ins. Co., 696 N.E.2d 1001, 1004 (Ohio 1998) (citation omitted). Vos v. Farm Bureau Life Insurance Co., 667 N.W.2d 36 (Iowa 2003) at 89. What is the common nucleus of operative facts in this case? Every tenant with a standard lease was subjected to the provisions of that lease. Every lease contained, at a minimum, illegal indemnity provisions, illegal automatic charges for carpet cleaning and illegal common area damage provisions. Plaintiffs suggest that two possible approaches to class certification are possible. The first is a broad approach. This certifies one class, consisting of tenants of Landlord with a standard lease who may have suffered damages that differed, but have in common the fact that Landlord has violated their rights under Chapter 562A. A more narrow approach would utilize subclasses under Iowa Rule of Civil Procedure 1.262(3)(c). See, e.g., Klay v. Humana, Inc., 382 F.3d 1241 at 93 (11 th Cir 2004) ( if the applicable state laws can be sorted into a small number of groups, each 4

5 containing materially identical legal standards, then certification of subclasses embracing each of the dominant legal standards can be appropriate. ) We should keep in mind that Landlord has over 1,000 tenants at time, Common Evidentiary Appendix Exhibit 2, Defendant s Answers to Plaintiff s Interrogatories, Interrogatory 2, while the Iowa Supreme Court has held that the numerical limit for a class, and thus for a subclass, is 40. Where the number of proposed class members exceeds forty, this is generally sufficient to show impracticality of joinder. Martin v. Amana Refrigeration, Inc., 435 N.W.2d 364, 368 (Iowa 1989). In Appendix A, attached hereto, are two possible sets of subclasses, again Plaintiffs prefer using one class or the less complex Subclass Set A, but defer to the court for the final decision as to how specific and how close to identical the individual subclasses must be. Defendants filed a one page Resistance to Plaintiffs Application for Class Certification with seven one line arguments that do not cite to other pleadings where these arguments might be explained in detail or supported by legal argument and factual evidence. 2 Defendants begin by arguing that they do not impose an automatic cleaning fee. This fails to deal with the issue of the illegal inclusion of automatic cleaning fees in their leases and other evidence that does establish that cleaning fees are automatically charged. Plaintiffs reply to this argument in detail their Reply to Defendants Resistance to Summary Judgment at pages All seven of these arguments are found on page one of Defendants Resistance to Plaintiffs Application for Class Certification. 5

6 Defendants then state that none of the proposed class representatives had amounts withheld from their security deposit for cleaning. No factual basis is provided for this assertion, which does not appear in Mr. Clark s affidavits and is in fact false. Both plaintiffs with standard leases whose tenancies have terminated, in fact, had their security deposits charged for both for generalized cleaning and specifically for carpet cleaning as well. See Plaintiffs Reply to Defendants Resistance to Summary Judgment: Exhibit 16, Dara Eifler Security Deposit Statement 2009 and Exhibit 17, Kirsten Jacobsen Security Deposit Statement Defendants state that they do not impose an automatic charge for common area damage. Plaintiffs have never asserted that the common area damage charge was automatic. Plaintiffs assertion is that the inclusion in Landlord s standard lease of charges for common are damage are illegal, and in addition, the actual imposition of charges for common area damage is also illegal. Plaintiffs discuss these issues in detail their Reply to Defendants Resistance to Summary Judgment at pages Defendants then argue that none of the proposed class representative have had an amount withheld from their security deposit for common area damage. Again, Plaintiffs leases contained provisions providing for charges for common area damage which is illegal in and of itself. Plaintiff Molly Burke, who is currently a tenant of Landlord, was billed for common area damage, which is discussed in detail in Plaintiffs Reply to Defendants Resistance to Summary Judgment at pages Defendants then argue that they have not sought indemnification from the proposed representatives or from any tenant. Once again the mere presence of indemnification clauses in Landlord s standard leases is sufficient for liability on the part 6

7 of Defendants and damage to plaintiffs and class members. This issue is discussed at length in Plaintiffs Reply to Defendants Resistance to Summary Judgment at pages 3-5. Defendants state that Defendants leases do not violate Iowa Code. This is the closest that Defendants actually come to defending the legality of automatic cleaning fees, common area damage and indemnification clauses. Nowhere in any of the pleadings or affidavits do Defendants provide any specific points, arguments or citations that would support the legality of the challenged provisions of their leases. Rather than attempting to argue that their leases are legal, Defendants have instead chosen to argue that they do not follow the plain language of their leases. Defendants then state that they have uniformly and consistently followed the notice requirements of Iowa law with regard to security deposit withholding. This argument is irrelevant because Plaintiffs have not, as yet, raised security deposit withholding notice as an issue. The next set of arguments with regard to class certification are raised in Defendants Memorandum of Law. The main legal argument, repeated in a variety of guises, is that there are no legal or factual issues common to the proposed class representatives or class members. As we have seen above class members do have common or joint interests, particularly since they all have almost identical illegal lease provisions. A key flaw in Defendants assertions in their Memorandum of Law is the repeated failure to establish a solid factual basis for their legal arguments. The first set of facts relied upon is contained on page 3 of Defendants Memorandum of Law where in their first argument Defendants assert that the sole fact that links all proposed class 7

8 members is that they have a common landlord and that the proposed representative parties have individualize and specific interests and claims. Defendants assert, Plaintiff, Kirsten Jacobsen disputed the amount of charges for cleaning her apartment. She did not claim that Apartments Downtown had no right to charge her for cleaning if her carpet or her apartment was dirty; she merely states the charge was unreasonable. On the other hand, Plaintiff Molly Burke disputes whether she should have received a charge at all for certain damages that occurred to her when her door was broken. These two representative plaintiffs have different interests in the lawsuit. On the one hand Jacobsen does not dispute the legality of a charge in general, but instead disputes the amount of that charge. On the other hand, Burke disputes whether a charge for any amount was acceptable or legal, she does not believe under any circumstances should she pay for the damage to her apartment door. Defendants Memorandum of Law at 3. The first major problem is that Defendants not even mention plaintiff Dara Eifler and since all that is necessary for class certification is a single class representative 3 their argument appears to fail at the outset because Ms. Eifler s factual situation is ignored. A second, and even more major problem is: what is the source of this recitation of the claims of proposed representative plaintiffs Ms. Jacobsen and Ms. Burke? No source is cited and it seemingly appears out of nowhere.. The factual recitation is not based on Plaintiffs Amended and Substituted Petition, nor on any of Plaintiffs pleadings where the claims of the Plaintiffs are set forth in detail. It certainly does not appear in Mr. Clark s affidavits nor could it as he has no personal knowledge of plaintiffs claims. With regard to summary judgment under Iowa Rule of Civil Procedure 1.981, The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, further affidavits, or oral testimony. When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials 3 Iowa Rule of Civil Procedure

9 in the pleadings, but the response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. emphasis supplied, Iowa Rule of Civil Procedure 1.981(5). However, if counsel is permitted to speculate, without prejudice to arguing that these unsupported allegations should not be considered or that it is too late to supplement Defendants resistances, the source may well be the depositions of plaintiffs conducted by Defendants counsel. Defendants counsel repeatedly attempted to ask the plaintiffs legal questions and tried to elicit from them the legal, rather than factual basis of their claims. Specifically defendants counsel asked the plaintiffs what they were complaining about in their lawsuit. Counsel for plaintiffs objected on the grounds that these questions called for legal conclusions. Plaintiffs then opined about what they personally felt was unfair, unjust or illegal with regard to Landlord s leases and actions toward them. If, in fact, this is the ultimate source of these assertions with regard to the plaintiffs claims, the opinion or knowledge of the plaintiffs with regard to the legal basis of their claims is irrelevant. Defendants certainly have the right to inquire as to the facts that underlie the plaintiffs legal claims. What Defendants are asserting however, is that having asked a college senior lay plaintiff in a deposition what she is complaining about in the lawsuit that her expressed opinion as to what her claims consist of legally then binds her and her counsel. As the Iowa Supreme Court has held with regard to questioning witnesses about the law, questions and opinions couched in terms of legal standards and conclusions, and the primary underlying reason they are often inadmissible, is that they "may be misunderstood by the witness and the jury if they do not 9

10 know the law's definition of" the legal standards used. 1 McCormick 12, at 55; accord Weinstein [2][b], at ("Another reason for excluding opinion testimony in the form of a legal conclusion is the danger of confusion that arises because legal terminology generally has a different meaning to lay persons than lawyers.") In re Detention of Palmer, 691 N.W.2d 413, 419 at 47 (Iowa 2005). See also Torres v. County of Oakland, 758 F. 2d 147 (6 th Cir. 1985) ( terms that demand an understanding of the nature and scope of the criminal law may be properly excluded. ) When this first factual basis for Defendants arguments is carefully examined, it evaporates and without a factual basis, the arguments relying on it fail. In their second argument Defendants argue in general terms, without citing any particular facts, that the claims of class members rely on a specific factual inquiry as to what should be withheld from their security deposit. This argument fails to account for the rights of tenants not to have an illegal lease and the fact that the illegal provisions of their leases are highly similar or identical and provide the basis for Defendants illegal actions. Defendants third argument is that Plaintiffs individual defenses are inimical to class certification, another variation on the lack of common issue argument. Defendants allege a different set of facts in their third argument, with regard to adjudication being dispositive of the interests of class members. Their argument with regard to Mr. Conroy is irrelevant on the issue of class certification, because Plaintiffs never sought to have Mr. Conroy as a class representative. Only Molly Burke, Dara Eifler and Kirsten Jacobsen are proposed as class representatives. 4 The allegations regarding Ms. Burke s claims not being ripe, Ms. Eifler owing rent and Ms. Jacobsen not paying a security deposit are dealt 4 Amended and Substituted Application for Certification as a Class Action at page 1. 10

11 with at length in Plaintiffs Reply to Defendants Resistance to Summary Judgment at pages and are meritless. Defendants fourth argument is that Landlord has not acted on grounds generally applicable to the whole class, once again a variation on the lack of common issue argument. Once again the assertion is made that Landlord s leases are irrelevant and only its action should be considered. Once again this falls afoul of the right of tenants not to be subjected to illegal lease provisions. Any variation in Landlord s application of lease provisions for issues actually raised by Plaintiffs is cured by subclasses. Defendants fifth argument is that individual fact questions predominate, simply restating the lack of common issues argument. Defendants sixth and seventh arguments are that there are other means of adjudicating the claims and defenses of class members other than a class action. Defendant asserts that Landlord has an internal complaints program, 5 but neglects to cite any evidentiary support for the existence, let alone the operation of this program. In any case this is clearly not what is contemplated by Rule 1.263(1)(g). Adjudication means to act as a judge 6 and thus Defendants suggestion of its supposed internal complaints program is an argument that it ought to be judge in its own case, certainly an attractive prospect for any defendant. Similarly Defendants stated preference for individual litigation is also understandable, since very few individual cases are brought against it. This is hardly surprising given that, as Defendants themselves state, many of its tenants are college 5 Memorandum of Law at

12 students who subsequently move away from Iowa City. 7 When all of Landlord s leases contain illegal provisions it is clear that the small number of cases filed against Defendants is not due to a lack of causes of action, but that class members do not know their rights and are unable to enforce them on their own. 8 In any case, Defendants are disingenuous in arguing that they would prefer individual litigation to a class action. They certainly would not prefer to have several thousand or even several hundred cases filed against them. Instead they hope that if a class is not certified in this case that the issues raised here will simply disappear and they can return to business as usual. Defendants eighth argument again relies on the no common factors argument. Defendants agree that the claims in this case are not part of another proceeding, or that the case was brought in the proper forum. Defendants eleventh argument, with regard to management of the class, again relies on the no common factors argument. Defendants agree that there are no conflicts of law in this case. Defendants thirteenth argument is that even though the amount in controversy for each class member is not more than a few hundred dollars 9 that this small amount of money is sufficient for class members to pursue litigation pro se, aided by Student Legal Services. Since Students Legal Services has only one attorney, assisted by four legal 7 Memorandum of Law at 9. 8 Counsel can represent that when the filing of the instant lawsuit was reported in the local news media, that it brought a flood of s and phone calls from irate tenants. In addition to the three plaintiffs added to the case after this court s order of April 27, 2011, counsel can represent that they have six additional clients ready to act as alternate plaintiffs and that they had to turn away multiple additional tenants who wish to be plaintiffs in the instant action. 9 Memorandum of Law at 9. 12

13 interns 10 to deal with all of the legal problems of tens of thousands of students, it is clearly impossible for it to represent even a small percentage of student tenants in pursuing litigation against Defendants. The few cases filed against Defendants are indicative of tenants lack of knowledge and lack of access to legal assistance, not the lack of desire on the part of aggrieved tenants to seek redress. The most important question in this case is whether or not Landlord s standard leases contain illegal provisions. If not, this case is over. If the leases do contain illegal provisions, then we are faced with the question of how most efficiently to adjudicate liability and determine appropriate remedies for thousands of current and past tenants. Flooding an overburdened Johnson County District Court with even hundreds of individual cases would hardly be efficient or even practical. Proceeding as a class action, whether to further adjudication or to an expeditious settlement, is clearly the most efficient, fair and reasonable way to proceed. WHEREFORE, Plaintiffs in their individual capacity & as Class Representatives on behalf of the Class move the Court to either certify a class in the instant action, consisting of all tenants of Landlord with standard leases that violate Chapter 562A or certify subclasses as detailed in Appendix A. 10 Student Legal Services website 13

14 Respectfully submitted, CHRISTINE BOYER AT CHRISTOPHER WARNOCK AT ½ East Washington Street 532 Center Street Post Office Box 1985 Iowa City, IA Iowa City, IA (319) (319) ATTORNEYS FOR PLAINTIFF CERTIFICATE OF SERVICE The undersigned hereby certifies that a true copy of this document was served on June, 2011, via first class mail, postage pre-paid, upon all attorneys of record and/or pro se parties at their respective addresses as shown herein: James Affeldt Elderkin and Pirnie, P.L.C. 115 First Avenue SE P.O. Box 1968 Cedar Rapids, IA Attorney for Defendant Christopher Warnock Attorney for Plaintiff 14