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Karen P., et al v. Terman Associates

May 17, 2013


The opinion of the court was delivered by: Jon S. Tigar United States District Judge


District Court United States

Three motions are pending in this action for housing discrimination and related claims.

First, Defendants Terman Associates ("Terman") and Goldrich & Kest Industries ("Goldrich") 15 move to stay this action pending the resolution of a related unlawful detainer action. ECF No. 53.

Second, Terman and Goldrich move under Federal Rule of Civil Procedure 12(b)(6) to dismiss the 17 complaint for failure to state a claim, or alternatively, they move under Rule 12(e) for a more 18 definite statement.*fn1 ECF Nos. 22, 30. Third, Defendant United States Department of Housing and 19 Urban Development ("HUD") moves under Federal Rule of Civil Procedure 12(b)(6) to dismiss 20 Plaintiffs' claims against it and its officials for failure to state a claim. 21

For the reasons set forth below, Terman and Goldrich's Motion to Stay is DENIED AS MOOT; Terman and Goldrich's Motion to Dismiss is GRANTED IN PART AND DENIED IN 23 PART; and HUD's Motion to Dismiss is GRANTED WITH LEAVE TO AMEND. 24


A. Plaintiffs' Claims*fn2

Plaintiffs Karen P., Abdirahman Guleed, and R.P., all of whom are appearing pro se, are 4 former tenants of Terman Apartments, a housing complex run by Defendants Terman and 5 Goldrich. Compl. ¶¶ 4, 6, ECF No. 10. Guleed and R.P. are sons of P. Id. ¶ 6. Plaintiffs lived in 6 a federally subsidized unit in Terman Apartments for 23 years until Terman and Goldrich evicted 7 them. Id. 8 P. added Guleed to the lease as co-head of household when he turned 18 years old. Id. ¶¶ 7, 8. When Guleed enlisted in the United States military on June 9, 2007, he notified 10 Goldrich's property manager, Tatyana Mendyuk, of this development. Id. ¶ 8. Mendyuk 11 "illegally removed" Guleed from the lease in 2008 when Guleed returned to active military duty after a brief recess in his training.


United States District Court Northern District of California

Plaintiffs allege that, in 2009, Mendyuk and Goldrich harassed them over the course of 14 several months by sending them multiple notices stating that Plaintiffs were required either to 15 move into a smaller unit or to pay market-rate rent because of a change in Plaintiffs' family 16 composition ("notices"). Id. ¶ 10. Plaintiffs allege that these notices violated HUD guidelines 17 because they gave them only seven days to move, as opposed to 30 days. Id. ¶ 10. Plaintiffs 18 allege that P. responded to these notices by notifying Goldrich that her family composition had not 19 changed. Id. After trying repeatedly to meet with Mendyuk to discuss the notices without 20 success, P. finally met with Mendyuk and told her that another tenant of the building who had 21 received a similar notice had been allowed to stay in her apartment because the apartment had a 22 washer and dryer. Id. Mendyuk allegedly became angry and asked P. to leave her office 23 immediately. Id. 24

After receiving a few more notices, P. contacted her son and the "Attorney of the U.S. Coast Guard," the latter of whom advised P. that Defendants' actions violated the Servicemembers 3 Civil Relief Act ("SCRA") and sent a letter to HUD and Goldrich on July 2, 2009, stating that 4 their actions were unlawful under the SCRA. Id. 5 Plaintiffs paid market-rate rent of $2,119 and $2,102 in June and July of 2009, which 6 imposed a severe financial hardship on them and required them to borrow money from friends. Id. 7 ¶ 11. On the advice of the military, Plaintiffs paid Goldrich $220 per month for rent from August 8 2009 to April 2010, but Goldrich returned all of Plaintiffs' checks uncashed. Id. 9 P. hired an attorney in September 2009 who engaged in negotiations with Terman and Goldrich to move Plaintiffs into a smaller unit, but the negotiations "broke down" because 11 Goldrich was unwilling to provide P. with reasonable accommodations for her disability. Id.¶ 11 12 Plaintiffs allege that they provided Goldrich with documentation of P.' disabilities on three United States District Court Northern District of California separate occasions in 2009. Id. 14

Plaintiffs initiated an action with HUD against Goldrich for violations of HUD's 15 guidelines. Id. ¶ 12. 16

Terman and Goldrich initiated an unlawful detainer action in state court that resulted in Plaintiffs' eviction. Id. ¶ 11. The details of the unlawful detainer action are discussed below. 18

Plaintiffs bring seven claims against Defendants Terman, Goldrich, and HUD: (1) housing 19 discrimination in violation of the Fair Housing Amendments Act ("FHAA"), (2) violations of the 20 Servicemembers Civil Relief Act ("SCRA"), (3) "assault and battery on a minor," (4) defamation, 21 (5) negligence, (6) "long time exposure to mold and sevier [sic] gas leak," and (7) intentional 22 infliction of emotional distress.*fn3

Plaintiffs' allegations. Plaintiffs make passing references to various laws throughout the complaint without stating explicitly whether Plaintiffs intend to assert claims under those laws. 26 (civil code 52.1), [t]he Fair Housing Act, California State Constitution 'protected citizens' 'federal statutes' 14th amendment, Acts; URICH, other disability and housing Acts"). The Court assumes 28 that the only causes of action that Plaintiffs intend to assert are the seven listed in section IV of the complaint, which is titled "Causes of Action." See id. at 3.

B. Unlawful Detainer Proceedings in State Court

Terman initiated an unlawful detainer action against P. in Santa Clara County Superior Court ("the unlawful detainer action") on September 4, 2009, on the basis of nonpayment of rent. 4

See Request for Judicial Notice ("RJN"), Ex. 1, ECF No. 54.*fn4 Terman alleged in the complaint 5 that P.'s rent was "increased to [the] market rent of $2,018.00 per month [e]ffective 06/01/2009 6 due to [P.'s] failure to transfer [to] a smaller unit as required per HUD regulations." Id. at 2. 7

In her amended answer, P. asserted a number of affirmative defenses, including: (1) that 8 the notices to pay rent or quit were defective and violated HUD regulations; and (2) that Terman 9 discriminated against P. based on her race, national origin, family status, gender, having children, 10 and by refusing to grant her request for a reasonable accommodation. RJN, Ex. 6. P. 11 subsequently filed a second amended answer to clarify that she was asserting disability 12 discrimination as a defense. RJN, Ex. 28, 30.

United States District Court Northern District of California

P., through her attorney, sought to have the unlawful detainer action stayed under the

SCRA. RJN, Ex. 8-10. P. argued that Guleed was on active duty in Afghanistan and that he 15 wished to "assert his right to . . . tenancy." RJN, Ex. 8 at 1. P. further argued that it was Guleed's 16 "removal from the lease by [Terman that] led. to" the unlawful detainer action. Id. The court 17 stated that it "[would] not consider" P.'s request for a stay under the SCRA because Guleed was 18 "not a named defendant" in the unlawful detainer action. RJN, Ex. 12. 19

P. raised the SCRA issue again in her pre-trial statement of the case. RJN, Ex. 23. P.

20 argued that "[s]he has struggled with [Terman] for two years to keep her adult son on the lease as 21 part of the household" while he was serving in Afghanistan, and that she "believed that the 22

[SCRA] allowed him to be a continuing part of the household, even though he was serving his 23 country overseas." Id. at 1. P. also raised issues relating to her disability discrimination defense. 24

Specifically, P. stated that she would "testify as to her mental disabilities, and that she requested 25 from [Terman] a reasonable accommodation under federal and state Fair Housing laws, which was 2 illegally and improperly refused by [Terman]." Id. P. further stated that such a refusal constituted 3 an act of discrimination. Id. 4

Terman filed a motion in limine to exclude P.'s disability defense on the basis that such 5 defense was "not relevant in a non-payment of rent case since it would not relate to the issue of 6 possession." RJN, Ex. 24 at 2. 7

Trial was held on December 23, 2009. RJN, Ex. 37. The court found that: (1) P. was 8 given proper notice of the rent increase; and (2) "[t]he defenses of retaliation and 9 discrimination . . . [were] not proper defenses because Defendant was already in default of rent 10 payments." Id. at 1-2. The court entered judgment in favor of Terman on January 12, 2010, and 11 issued a writ of execution for possession of the premises so that Terman could recover possession 12 of the apartment occupied by Plaintiffs. Id.

United States District Court Northern District of California

P. moved to stay the enforcement of the court's judgment and to quash the writ of

14 attachment on the basis that the unlawful detainer complaint was substantively and procedurally 15 deficient. RJN, Ex. 38-41. Guleed then moved to assert a claim of right to possession of the 16 apartment on the basis that, because he was on military service during the unlawful detainer 17 action, the court should not have entered a judgment against him and should have stayed the action 18 at his request under the SCRA. RJN, Ex. 43. He also argued that his removal from the lease 19 while he was on military service violated his rights under the SCRA. See id. at 2. The court 20 denied P.'s motion to stay the enforcement of the judgment and Guleed's motion to assert a claim 21 of right to possession without providing any reasoning. RJN, Ex. 47. The minutes issued by the 22 court, however, state that the "matter [was] heard and argued." Id. 23

P. filed an appeal of the unlawful detainer action on February 8, 2010. RJN, Ex. 50. Both

P. and Guleed filed a second notice of appeal on March 5, 2010. RJN, Ex. 54. Plaintiffs' primary 25 claim on appeal was that the trial court erred by failing to consider their SCRA defenses. RJN, 26

Ex. 60 at 6. The appeal was stayed pending the resolution of a separate bankruptcy action that P. 27 filed in the United States Bankruptcy Court for the District Court for the Northern District of 28

California on February 5, 2010. RJN, Ex. 55, 63. The stay was lifted on October 12, 2012, after

the bankruptcy case was dismissed. RJN, Ex. 67. The Appellate Division of the Santa Clara 2

County Superior Court dismissed the appeal involuntarily on January 25, 2013, for failure to 3 procure the record. RJN, Ex. 70, ECF No. 85. This involuntary dismissal became final on 4

February 24, 2013.*fn5

C. Jurisdiction

The Court has jurisdiction over this action under 28 U.S.C. §§ 1331 and 1367.


A. Terman and Goldrich's Motion to Stay

Before the appeal of the unlawful detainer action was dismissed involuntarily, Defendants

Terman and Goldrich moved to stay this action pending the final resolution of the unlawful 11 detainer action on the basis that that action bars each of the claims in the complaint based on res judicata. ECF No. 53.

United States District Court Northern District of California

Because the dismissal of the appeal of the unlawful detainer action is now final, the

14 unlawful detainer action is fully resolved. Accordingly, Terman and Golrich's Motion to Stay is 15


B. Terman and Goldrich's Motion to Dismiss

Terman and Goldrich move to dismiss the complaint on the basis that each of the claims in

18 the complaint is barred by res judicata. Alternatively, Defendants move to dismiss Plaintiffs' 19 claims on the ground that Plaintiffs fail to state a claim upon which relief can be granted. Finally, 20

Defendants move for a more definite statement in the event that the Court declines to dismiss 21

Plaintiffs' claims. The Court addresses each of these ...

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