CHRISTOPHER R. COOPER, District Judge.
In September 2017, plaintiff Sarah Pleznac filed this putative class action against her former landlord, Equity Residential Management, L.L.C. The gist of Pleznac's complaint is that Equity perpetrated a "bait-and-switch" scheme that fooled her and other tenants into paying higher rents than they expected, and that it retaliated against her for complaining about its practices. Equity seeks to dismiss all of Pleznac's claims under Federal Rule of Civil Procedure 12(b)(6), contending that she has failed to adequately plead several of her claims and that others are time-barred. The Court will grant Equity's motion with respect to some of Pleznac's claims and deny it for others.
Equity is an S&P 500 company that owns and manages hundreds of apartment buildings around the country, including several in the District of Columbia. Ms. Pleznac lived in one of its D.C. properties, 3003 Van Ness, from 2013 to 2017. According to Plenzac, Equity's scheme unfolded as follows: Sometime in January 2013, she saw an apartment advertised at 3003 Van Ness for $1,693 per month. Interested, Pleznac contacted Equity's rental office and applied to lease the apartment. Equity drew up a lease and told her that the District's rent-control statute applied to the property, meaning that rent could only rise by the amount of the increase in the Consumer Price Index ("CPI") plus an additional two percentage points. Pleznac signed the lease and moved in.
But Pleznac claims that, throughout this process, Equity obfuscated that the advertised rent was heavily discounted: the lease included a so-called "rent concession" of some $1,000 per month from the "base rate." To Pleznac's apparent surprise, when her yearlong lease was set to expire, she was notified that her rent would rise by 2% over the CPI multiplied by the higher base rate—not by the lower discounted rate—resulting in a significant hike. Equity then used the threat of that higher rent—combined with the "great expense and inconvenience" of moving after just one year—to "coerce[]" her to sign several subsequent one-year leases with rents higher than she expected when she signed the initial lease. Notice of Removal Ex. A ("Compl."), ECF No. 1, ¶ 52. She alleges that Equity treated thousands of its tenants similarly.
Pleznac claims that Equity's practices violated the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C. Code § 28-3904, and amounted to a breach of contract, intentional infliction of emotional distress, and fraud. She also alleges that, when she and other tenants complained about Equity's practices, the company retaliated by filing frivolous lawsuits against them for nonpayment of rent. It would also report false information to credit reporting agencies—including that the tenant had been evicted and that she owed Equity overdue rent—and then refuse to correct those knowingly false reports after tenants contested them. In Pleznac's view, these suits against tenants amounted to malicious prosecution. And the false reports to credit agencies were both defamatory and contrary to the Fair Credit Reporting Act, a federal statute that requires entities that relay information to consumer reporting agencies to diligently investigate disputed credit-related information and promptly correct any errors,
Pleznac initially filed suit in D.C. Superior Court, but Equity removed the case to federal court. The Court upheld the removal over Pleznac's objection, finding that the case was removable under the Class Action Fairness Act because it involved over 100 potential class members and put at least $5 million at issue. Op. & Order, ECF No. 19, at 4-5 (May 8, 2018). Equity has now moved to dismiss all of Pleznac's claims on various grounds pursuant to Federal Rule of Civil Procedure 12(b)(6).
To survive a motion to dismiss, a complaint must contain sufficient factual matter to "state a claim to relief that is plausible on its face."
Equity seeks to dismiss Pleznac's CPPA and fraud claims on the basis that they are untimely. The Court agrees that dismissal of these claims is proper.
Under D.C. law, a plaintiff must bring a claim under the CPPA or for fraud within three years from the time when her right to maintain the action accrues.
Pleznac insists, however, that her claims remain viable because Equity committed a "continuing tort" against her, which included some tortious acts within the limitations period. The continuing tort doctrine allows recovery for extended harms that began outside of the applicable limitations period. Under District of Columbia law, the doctrine applies only where a plaintiff suffers "(1) a continuous and repetitious wrong, (2) with damages flowing from the act as a whole rather than from each individual act, and (3) at least one injurious act . . . within the limitation period."
Pleznac's reliance on the continuing tort doctrine is misplaced. The doctrine applies only where the claimed "injury might not have come about but for the entire course of conduct."
In other words, the continuing tort doctrine does not mean "that accrual should be tolled until the plaintiff fully appreciates the `impact' of the harm directed at him."
All of this is to say that the doctrine is inapplicable to Pleznac's CPPA and fraud claims. There is no way to read her complaint as alleging harm that materialized only through Equity's course of conduct as a whole. Quite the contrary, the nature of her claims show that she seeks redress for discrete, identifiable instances of alleged deception with continuing consequences.
Compl. ¶ 73. Similarly, Pleznac's fraud claims rest on allegations that Equity fraudulently induced her into signing a lease (Count 7); fraudulently concealed the actual, pre-concession rent (Count 8); and fraudulently misrepresented how the District's rent-control statute would apply to her lease (Count 9).
Thus, under Pleznac's own legal theories, Equity violated the law when it advertised the apartment with its lower, post-concession rent and when it misled her about the application of the rent-control statute. What followed was not a series of "injurious act[s]" for purposes of the continuing tort doctrine, but rather notice of the purported deception (through the September 2013 renewal notice) and subsequent injuries attributable to being "trapped" by the initial deception, Compl. ¶ 2.
On the latter point, Pleznac urges that after receiving the 2013 renewal notice, she agreed to renew her lease for several yearlong terms, and that some renewals occurred within the limitations period. She contends that the high transaction costs of moving, combined with Equity's threat of increasing her rent based on the pre-concession price, forced her to do so. In her view, each renewal therefore makes up part of an ongoing injury. But her own arguments belie this characterization. She explains that "the initial deception involving the first rent concession begins the cycle of trapping victims, and the cycle is perpetuated by each subsequent renewal lease." Pl.'s Opp'n Mot. Dismiss at 8 (emphasis added). In other words, Pleznac admits that she viewed each renewal as causing "appreciable" harm stemming from the initial deception. And because she first renewed her lease in January 2014—over three years before she filed suit— her claims based on any initial deception are necessarily untimely.
To be sure, even though Pleznac's claims do not come within the continuing tort rule, that does not necessarily mean that she is barred from seeking relief based on the subsequent lease renewals. It could theoretically be the case that the renewals were independent acts of deception rather than mere injuries flowing from the initial misrepresentations or omissions.
At bottom, because Pleznac admits learning of the alleged deception and experiencing some resulting injury over three years before filing her complaint, she cannot recover for that deception under the CPPA or through claims for fraud.
Equity contends that Pleznac failed to adequately plead one element of her claim under the Fair Credit Reporting Act ("FCRA"). The Court disagrees.
Pleznac seeks relief under § 1681s-2(b) of the FCRA, which requires parties who furnish credit information to reporting agencies to investigate disputed credit information and to correct any inaccuracies. 15 U.S.C. § 1681s-2(b)(1);
Equity agrees that Pleznac adequately pled the first of these requirements. She claims to have contacted Transunion in March 2017 to dispute the accuracy of her credit information. Compl. ¶ 81. But Equity contends that her allegation of the second element is too cursory to survive a motion to dismiss. Not so. Pleznac alleges based "on information and belief" that Transunion provided notice of the disputed information to Equity. Compl. ¶ 82. At least one court in this district has held that, where a plaintiff plausibly alleges that they notified a reporting agency of a dispute, the plaintiff need not allege with particularity that the reporting agency in turn notified the furnisher. Rather, that court explained—and this one agrees—that one can infer the reporting agency's compliance with its statutory duty to notify the furnisher, 15 U.S.C. § 1681i(a)(2).
Equity next argues that Pleznac's common law defamation claim is preempted by the FCRA. That is correct. The FCRA expressly preempts all state law claims "with respect to any subject matter regulated under . . . section 1681s-2 . . . relating to the responsibilities of persons who furnish information to consumer reporting agencies." 15 U.S.C. § 1681t(b)(1)(F). In other words, "claims made under state law concerning the furnishing and correcting of information to credit reporting agencies are preempted by FCRA."
Pleznac's claim for defamation falls squarely within the FCRA's preemption provision. All of Equity's allegedly defamatory statements were reports of credit-related information. Compl. ¶ 93 ("credit reports . . . which stated that Plaintiff had been evicted");
Next, Equity seeks to dismiss Pleznac's claim for malicious prosecution on the ground that she did not adequately plead one element of her claim—that of "special injury" resulting from the defendant's legal action.
To establish a claim of malicious prosecution under D.C. law, a plaintiff must plead: "(1) that the underlying suit terminated in plaintiff's favor; (2) malice on the part of the defendant; (3) lack of probable cause for the underlying suit; and (4) special injury occasioned by the plaintiff as a result of the original action."
Under these standards, Pleznac's claim would not likely survive if she identified only one wrongful suit. But under D.C. law, consecutive suits brought "maliciously" and "without just cause and in bad faith" categorically count as "special injury."
That rule applies here.
Equity contends that Pleznac's allegations are too "skeletal" to support a breach-of-contract claim. Def.'s Reply at 11. This argument is baseless. Pleznac alleges (1) she and Equity previously entered a settlement agreement following "extensive litigation and a successful mediation," Compl. ¶ 58, and that Equity's suits for rent arrears were expressly barred by that agreement, id. ¶ 60 (quoting settlement provision stating that "Tenant, upon execution of this Agreement by the parties hereto, shall be deemed by landlord to be current in her rent"). These allegations easily survive a motion to dismiss.
Equity also seeks to dismiss Pleznac's claim for intentional infliction of emotional distress ("IIED"), contending that she has not adequately pled its elements. The Court disagrees.
"To succeed on a claim of intentional infliction of emotional distress, a plaintiff must show (1) extreme and outrageous conduct on the part of the defendant which (2) intentionally or recklessly (3) causes the plaintiff severe emotional distress."
But at this stage of the litigation, Pleznac must only allege facts that, if borne out through discovery, would support findings on those elements. She has done so. In addition to describing Equity's alleged scheme and its retaliatory lawsuits against her, Pleznac alleges that the company "further retaliated against [her] by failing to provide services, including refusing to make repairs to her unit, and repeatedly sending her account statements claiming rents in excess of the lease and allowed late charges . . . and otherwise harassing [her] and making it known she was being targeted for mistreatment by . . . staff in the building." Compl. ¶ 66. She also purports that Equity's course of conduct caused her "extreme mental distress."
Finally, Equity claims that Count 10 of the complaint—titled "Punitive Damages"—must be dismissed because there is no such thing as a claim for "punitive damages."
Equity's motion to dismiss is therefore granted with respect to Pleznac's claims under the CPPA (Count 1) and for defamation (Count 3), fraud (Counts 7-9), and punitive damages (Count 10). Equity's motion is denied with respect to her claims under the Fair Credit Reporting Act (Count 2) and for breach of contract (Count 4), malicious prosecution (Count 5), and intentional infliction of emotional distress (Count 6). A separate order accompanies this memorandum opinion.