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Milian v. Worsham Kreynus Properties, LLC

United States District Court, E.D. Virginia, Richmond Division

June 11, 2019

MANUEL MILIAN, et al, Plaintiffs,
v.
WORSHAM KREYNUS PROPERTIES, LLC, Defendant & Third-Party Plaintiff,
v.
GEORGE H. CROFT, JR., Third-Party Defendant.

          MEMORANDUM OPINION

          David J. Novak, United States Magistrate Judge.

         Plaintiffs Manuel Milian, Karla Guzman and Ruth Tobar (collectively, "Plaintiffs") bring this action against Worsham Kreynus Properties, LLC ("Defendant"), alleging that Defendant engaged in illegal and discriminatory housing practices and committed other wrongs in violation of Plaintiffs' rights under the federal and Virginia Fair Housing Acts and as tenants of Worsham Mobile Home Park ("Worsham Park" or the "Park"). On February 22, 2019, Defendant filed a Third-Party Complaint (ECF No. 20) against Third-Party Defendant George C. Croft, Jr. ("Croft"), alleging that Croft is or may be liable to Defendant for the claims in Count VIII of Plaintiffs' Amended Complaint (ECF No. 15), which relate to Defendant's alleged failure to repair drainage problems at Worsham Park in violation of Va. Code § 55-248.43(2). This matter now comes before the Court by consent of the parties pursuant to 28 U.S.C. § 636(c)(1) on Croft's Motion to Dismiss (ECF No. 45), moving to dismiss Defendant's Third-Party Complaint for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1), or, in the alternative, to sever the Third-Party Complaint pursuant to Rule 12(h)(3). For the reasons set forth below, the Court GRANTS Croft's Motion to Dismiss (ECF No. 45) and DISMISSES WITHOUT PREJUDICE Count VIII of Plaintiffs' Amended Complaint (ECF No. 15) and Defendant's Third-Party Complaint (ECF No. 20).

         I. BACKGROUND

         When, as here, "a defendant asserts that the complaint fails to allege sufficient facts to support subject matter jurisdiction, the trial court must apply a standard patterned on Rule 12(b)(6) and assume the truthfulness of the facts alleged." Kerns v. United States, 585 F.3d 187, 193 (4th Cir. 2009). Accordingly, the Court accepts the following facts.

         A. Allegedly Discriminatory Housing and Rent Collection Practices

         Defendant owns and operates Worsham Park, a mobile home park composed of 106 lots located in Richmond, Virginia. (Am. Compl. (ECF No. 15) ¶ 14.) Worsham Park tenants own their homes, but rent lots from Defendant. (Am. Compl. 114.) Of these tenants, approximately 85 percent identify as Hispanic or Latin American. (Am. Compl. ¶ 15.) And 75 percent of the Hispanic/Latino households at Worsham Park include minor children. (Am. Compl. ¶ 15.)

         Between 2008 and November 2017, Defendant collected a fifteen-dollar-per-resident rent surcharge for each resident occupying a home beyond the first one or two adults listed on the title to the home. (Am. Compl. ¶¶ 16-17; see also Ex. A to Am. Compl. ("Jan. 2017 Lease") (ECF No. 15-1) at 1 (showing $15.00 charge "per extra individual and/or residing co-signer" not "on title of the trailer"); Ex. B to Am. Compl. ("2010 Homeowner Responsibilities") (ECF No. 15-2) at 1, § A.6. ("An extra charge will be in effect for adult persons (including spouses) not on the title or purchase agreement for the trailer. Each child or family member residing in the home will be charged an added fee.").) In addition to the per-resident rent surcharge, Defendant also enforced policies that Plaintiffs allege discriminated against tenants with families and Hispanic/Latino tenants, including: (1) a 10:00 p.m. curfew for minors seventeen and under Sunday through Thursday and an 11:00 p.m. curfew for such minors on Friday and Saturday, (Jan. 2017 Lease ¶ 15.a); (2) a requirement that minors be under adult supervision at all times, (Jan. 2017 Lease ¶ 15.c; 2010 Homeowner Responsibilities at 4, § G.7.); (3) a prohibition on the consumption of alcohol in front of minors, (Jan. 2017 Lease ¶ 15.d.); (4) the threat of immediate eviction if children entered the lot of another tenant without that tenant's permission, (2010 Homeowner Responsibilities at 4, § G.6.); (4) a prohibition on "kiddie pools" throughout the Park, (2010 Homeowner Responsibilities at 9, § F.4.); and, (5) a requirement that minor invitees be supervised by an adult parent resident, (2010 Homeowner Responsibilities at 13, § C.3.). (Am. Compl. ¶ 19.) Moreover, since 2009, Defendant has issued Violation Notices to tenants for various enumerated infractions, including one infraction titled "Children." (Am. Compl. If 21; Ex. C to Am. Compl. ("Sample Notice") (ECF No. 15-3).)

         B. Policies and Practices Allegedly Violating Virginia Law

         Until November 2017, the Worsham Park Lease and Homeowner Responsibilities documents included several other provisions which Plaintiffs allege violated either the Manufactured Home Lot Rental Act ("MHLRA"), Va. Code § 55-248.41 et seq., or the Virginia Residential Landlord and Tenant Act ("VRLTA"), Va. Code § 55-248.2 et seq., namely: (1) provisions prohibiting the subletting of mobile homes or rooms within mobile homes at the Park, (Jan. 2017 Lease ¶ 8; 2010 Homeowner Responsibilities at 1, §§ A.10-11. and 3, §§ E.5., E.7.); (2) provisions requiring that mobile homes undergo a landlord inspection before resale and giving Defendant discretion to deny potential buyers, (Jan. 2017 Lease ¶ 8; 2010 Homeowner Responsibilities at 2, §§ A.11., A. 18., B.1.b. and 13, § C.I.); (3) provisions requiring residents to constantly supervise any guests and otherwise restricting the movement of guests in the Park, (Jan. 2017 Lease ¶ 15.b.; 2010 Homeowner Responsibilities at 2, §§ A.15., C.3. and 3, §§ E.I., E.6.); (4) a provision limiting the liability of Defendant and Plaintiffs' right to recover damages, (Jan. 2017 Lease ¶ 16); (5) a provision giving evicted tenants only thirty days, not the statutory ninety days, to sell or remove their home from the Park, (Jan. 2017 Lease If 11); (6) a provision giving Defendant wide discretion to deny lease renewals, (2010 Homeowner Responsibilities at 1-2, § A. 14.); (7) a provision allowing Defendant to increase the rent of all tenants in the Park before the end of a lease term, (Jan. 2017 Lease ¶ 4); and, (8) provisions allowing for the eviction of tenants for reasons beyond those enumerated under Virginia law, (2010 Homeowner Responsibilities at 1, § A.13., 3, § D.5., 4, § G.6., and 12, § A.2.). (Am. Compl. ¶ 25.) Moreover, Defendant failed to provide Plaintiffs with a copy of the MHLRA as required. (Am. Compl. ¶¶ 27-28.)

         In addition to the alleged violations of Virginia law contained in the Lease and the Homeowner Responsibilities documents, Plaintiffs further maintain that Defendant violated the MHLRA by failing to repair the Park's storm-water drainage system such that the northern side of the Park flooded each time that it rained heavily. (Am. Compl. ¶¶ 29-30.) Specifically, with each heavy rain, the northern side of the Park filled with water up to eighteen inches deep in parts, covering the roads leading to the Park's only entrances and exits. (Am. Compl. ¶¶ 30-31.) The flooding took approximately three to four days to fully drain, preventing Plaintiff Ruth Tobar from leaving the Park and otherwise preventing Plaintiffs from enjoying the use of their properties. (Am. Compl. ¶¶ 32-33.) The flooding issues have persisted despite numerous complaints from Plaintiffs. (Am. Compl. ¶ 36.)

         C. Plaintiffs' Complaint

         On October 24, 2018, Plaintiffs filed suit in this Court, (ECF No. 1), and, on January 25, 2019, Plaintiffs filed their Amended Complaint, (ECF No. 15). Based on the above facts, Plaintiffs presented eight counts in their Amended Complaint. (Am. Compl. ¶¶ 38-63.) Counts I and II alleged that Defendant's lease terms and other policies violated 42 U.S.C. § 3604(b) by discriminating against tenants based on familial status and national origin. (Am. Compl. ¶¶ 38-44.) Specifically, Count I alleged that Defendant's lease terms and rules "explicitly include more restrictive terms and conditions on families with children than on families without children, and are not justified by any business necessity." (Am. Compl. ¶ 40.) Count II argued that the overlap between tenants with children and Hispanic/Latino tenants "is so significant, [the Park's] owners and staff knew or should have known that familial status discrimination predictably and adversely impacted Hispanic/Latino residents." (Am. Compl. ¶ 43.) Relatedly, Count III alleged that Defendant violated 42 U.S.C. § 3604(c) by publishing terms in its lease, rules and violation notices that "facially indicate[d] a preference, limitation, and discrimination based on familial status by singling out children for worse treatment." (Am. Compl. ¶ 47.)

         Mirroring Counts I through III, Counts IV, V and VI raised claims of housing discrimination under Virginia's Fair Housing Act. (Am. Compl. ¶¶ 49-58.) Specifically, Count IV alleged that Defendant's lease and rules violated Virginia's Fair Housing Act by discriminating against tenants with children. (Am. Compl. ¶ 51.) Likewise, Count V reiterated that the overlap between tenants with children and Hispanic/Latino tenants imputed to Defendant a knowledge that its discrimination against tenants with children would adversely impact tenants of Hispanic/Latino origin. (Am. Compl. ¶ 54.) And Count VI mirrored the claims in Count III, alleging that Defendant violated Virginia's Fair Housing Act by publishing a lease, rules and violation notices that indicated a preference for tenants without children. (Am. Compl. ¶ 58.)

         Finally, Counts VII and VIII alleged that Defendant violated the MHLRA and VRLTA. (Am. Compl. ¶¶ 59-70.) Specifically, Count VII alleged that Defendant's lease and incorporated rules included several provisions, as mentioned above, which violated either statute. (Am. Compl. ¶ 60.) And Count VIII alleged that Defendant's failure to address the storm-water ...


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