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Jimenez v. Tsai

United States District Court, N.D. California, San Jose Division

June 5, 2017

ISMAEL JIMENEZ, et al., Plaintiffs,
DAVID Y TSAI, et al., Defendants.


          EDWARD J. DAVILA United States District Judge

         Plaintiffs[1] are four low-income Latino families residing at Las Animas Apartments in Gilroy, California. Plaintiffs bring this action, on behalf of themselves and their minor children, against the property owner, David Tsai, and property managers, Undine Tsai and Shang Shen (collectively, “Defendants”), for damages arising from the poor living conditions present at the Las Animas Apartments. Plaintiffs allege that Defendants continued failure to properly maintain or make necessary repairs to the property violates the Federal and California Fair Housing Act (“FHA”), and gives rise to related state law claims. Presently before the court is Defendants' Motion to Dismiss Claims I-VIII of Plaintiffs' First Amended Complaint (“FAC”) pursuant to Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. Dkt. No. 40 (“MTD”).

         The court has subject matter jurisdiction over Plaintiffs' Federal FHA discrimination claims in this action pursuant to 28 U.S.C. § 1331, and maintains supplemental jurisdiction over Plaintiffs' state law claims pursuant to 28 U.S.C. § 1367. Based on a careful review of the parties' briefing, as well as the arguments of counsel at the hearing held on April 20, 2017, Defendants' Motion will be GRANTED IN PART and DENIED IN PART for the reasons explained below.

         I. BACKGROUND

         Plaintiffs are self-described “low income Latino residents” of Las Animas Apartments. The Las Animas Apartments are comprised of two complexes in Gilroy, California: a 32-unit building located at 611 E. 7th Street, as well as a 20-unit building located at 590 Stoney Court, (collectively “the Gilroy Complexes”).

         Ismael Jimenez, Yolanda Jimenez, Antonio Jimenez, Angeles Jimenez, and Angeles' two minor children - “N.J.” (age 14) and “S.J.” (age 8) - (collectively “the Jimenez Family”) are residents of the Gilroy Complex at 590 Stoney Court. FAC ¶ 8. The Jimenez Family has lived at this location since November 2008. Id. The members of the Jimenez Family identify as Latino and are of Mexican descent. Id.

         Carmentina Herrera, her adult son Luis Alvarez, and her three minor children - “B.A.” (age 16), “S.A.” (age 15), and “A.A.” (age 12) - (collectively “the Herrera Family”) are all residents of the Gilroy Complex at 590 Stoney Court and have lived there since February 2015. Id. ¶ 9. The members of the Herrera Family identify as Latino and are of Mexican descent. Id.

         Ebaristo Alavez, Josefa Jimenez, and their five minor children - “G.A.” (age 17), “J.A.” (age 14), “D.A.” (age 12), “C.A.” (age 8), and “A.A.” (age 6) - (collectively, “the Alavez-Jimenez Family”) are all residents at 590 Stoney Court and have lived there since November 2008. Id. ¶ 10. The members of the Alavez-Jimenez Family identify as Latino and are of Mexican descent. Id.

         Jesucita Ortiz, Rodolfo Robles, and their five minor children - E.R.” (age 14), “E.R.” (age 12), “J.D.R.” (age 10), “L.R.” (age 7), and “A.R.” (age 6) - are residents at 611 E. 7th Street in Gilroy, California. They have lived there since October 2009. Ms. Ortiz and Mr. Robles identify as Latino and are of Mexican descent.

         Project Sentinel is a non-profit California corporation with its principal place of business located at 1490 El Camino Real, in Santa Clara, California. Compl. FAC ¶ 12 “Project Sentinel's mission is to develop and promote fairness and equality of housing for all persons and to advocate peaceful resolution of disputes for community welfare and harmony and one of its specific goals is the elimination of all forms of illegal housing discrimination.” Id. In pursuit of this mission, Project Sentinel engages in activities including “(1) investigating allegations of discrimination; (2) conducting tests of housing facilities to determine whether equal opportunity in housing is provided; (3) taking such steps as it deems necessary to assure such equal opportunity and to counteract and eliminate discriminatory housing practices; and, (4) providing outreach and education to the community regarding fair housing.” Id.

         The Gilroy Complexes are owned by Defendant David Tsai, who currently resides in Santa Clara County, California . FAC ¶ 13. Defendant Undine Tsai owns residential rental properties located at 10160 and 10162 Park Circle West in Cupertino, California (the “Cupertino Properties”). Plaintiffs assert that Undine Tsai also actively participates in management of each of the Gilroy Complexes and the properties in Cupertino. FAC ¶ 14. Plaintiffs contend, on information and belief, that Defendant Shang Shen is the property manager at the Gilroy Complexes.

         Plaintiffs allege that residents at the Gilroy Complexes have long endured unsanitary and unsafe living conditions, including, inter alia, infestations of rats, mice, roaches, and bedbugs; serious sewage back-ups and plumbing leaks; lack of operating heaters; pervasive mold, especially in bathrooms; dangerous electrical problems, unsecured locks on the doors, inadequate lighting, and loose railings and rotting second floor walkways. FAC ¶¶ 2, 34, 42, 51, 55, 66, 73, 80. That despite knowing of these persistent unhealthy and unsafe conditions, Defendant owner David Tsai and Defendant property managers Undine Tsai and Shang Shen largely ignored Plaintiffs' numerous requests for repairs and complaints regarding the habitability of their apartment units. FAC ¶¶ 2, 35, 42-44, 51-52, 55-60, 66-68.

         Plaintiffs further allege that the poor conditions of the Gilroy Complexes stand in stark contrast to the conditions of the Cupertino Property owned by Defendant Undine Tsai. Based on a survey conducted by Project Sentinel, Plaintiffs allege that “the majority of responsive households at the Cupertino property stated that there were no maintenance issues in their units” and indicated that “they were satisfied with the time it took for repairs to be made.” FAC ¶ 76. Plaintiffs represent that the Cupertino Property is made up East Asian, Indian, and White residents, and has no known Latino households. FAC ¶ 77.

         With respect to the Jimenez Family specifically, Plaintiffs allege that on April 27, 2016, representatives from the Law Foundation of Silicon Valley visited the Jimenez Family's unit. FAC ¶ 46. On June 7, 2016, Defendants served the Jimenez Family with a 60-Day Notice of termination of tenancy. Id. And one day later, on June 8, 2016, Plaintiffs allege that Defendant Undine Tsai came to the Jimenez Family's apartment unit and asked “whether any lawyers had come to ask them about the conditions of their unit.” Id. On July 13, 2016, an attorney with the Law Foundation of Silicon Valley sent a letter on behalf of the Jimenez Family to Defendant David Tsai seeking rescission of the 60-Day Notice as retaliatory. FAC ¶ 47. On July 19, 2016, counsel for Defendants responded, asserting that the notice to terminate tenancy was not retaliatory and “providing alternative reasons to terminate tenancy not included in the 60-Day ‘no-cause' notice.” Id.

         Plaintiffs filed the original complaint in this case (Dkt. No. 1) on August 5, 2016. FAC ¶ 48. Eleven days later on August 16, 2016, Defendant David Tsai filed an unlawful detainer action against the Jimenez Family. FAC ¶ 49.

         Apart from the concerns regarding the conditions of the property, Plaintiffs also contend that Defendants regularly intimidated children at the Gilroy Complexes in an effort to prevent them from playing outside and in the common areas. Plaintiffs allege that Shang Shen, the on-site property manager, yelled at their children on numerous occasions for playing outside, ordered Plaintiffs to remove a basketball hoop in their own yard, took balls and toys away from the children, and even nailed shut Ms. Ortiz and Mr. Robles' fence to prevent the children from having access to the common area. FAC ¶¶ 3, 30-31, 41, 62-64. Plaintiffs contend that Defendants' actions, behaviors, and practices have created such a hostile environment that when children see Shang Shen, they retreat indoors out of fear. Id. ¶ 3. According to Plaintiffs, this has resulted in families with children being “unable to fully enjoy the place where they live.” Id.


         Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim with sufficient specificity to “give the defendant fair notice of what the… claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Although particular detail is not generally necessary, the factual allegations “must be enough to raise a right to relief above the speculative level” such that the claim “is plausible on its face.” Id. at 556-57. A complaint which falls short of the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). Dismissal of a claim under Rule 12(b)(6) may be based on a “lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988); see Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

         At the motion to dismiss stage, the court must read and construe the complaint in the light most favorable to the non-moving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). The court must accept as true all “well-pleaded factual allegations.” Ashcroft v. Iqbal, 556 U.S. 662, 664 (2009). However, “courts are not bound to accept as true a legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555. “In all cases, evaluating a complaint's plausibility is a context-specific endeavor that requires courts to draw on ... judicial experience and common sense.” Levitt v. Yelp! Inc., 765 F.3d 1123, 1135 (9th Cir. 2014) (quoting Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011)).

         When deciding whether to grant a motion to dismiss, the court generally “may not consider any material beyond the pleadings.” Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 1555 n. 19 (9th Cir. 1990). However, the court may consider material submitted as part of the complaint or relied upon in the complaint, and may also consider material subject to judicial notice. See Lee v. City of Los Angeles, 250 F.3d 668, 688-89 (9th Cir. 2001). In the event that a motion to dismiss is granted, “leave to amend should be granted ‘unless the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.'” DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir. 1992) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986)).


         A. Undine Tsai is a Proper Party to this Action

         As an initial matter, Defendants argue that Undine Tsai is not a proper party to this action because she has no ownership interest in the Gilroy Complexes at issue. See MTD at 6. In support of this position, Defendants request that the court take judicial notice of three Grant Deeds filed at the Santa Clara Recorder's Office regarding the properties. See Dkt. No. 41 (“RJN”). The deeds show that on October 27, 2006, David Tsai transferred his legal interest in the Cupertino property to his wife, Undine Tsai, and on the same day, Undine Tsai transferred her legal interest in both Gilroy properties to her husband, David Tsai. Id. at Exs. A-C. Accordingly, Defendants move to dismiss all claims against Undine Tsai as a matter of law.

         Notwithstanding this evidence, the court finds that Plaintiffs sufficiently allege potential liability as to Undine Tsai that is independent of any legal interest in the Gilroy Complexes. Plaintiffs allege that Undine Tsai was a property manager for the Gilroy Complexes and “actively participate[d] in management of” each of the Gilroy and Cupertino properties. FAC ¶¶ 2, 14, 16109. In her capacity as property manager, Plaintiffs contend that Undine Tsai knew of unsanitary and unsafe conditions at the Gilroy Complexes - including a lack of adequate heating, “sewage backups, dangerous electrical problems, and infestations of rats, roaches and bedbugs” - and “ignored Plaintiffs' numerous requests to repair these significant problems.” FAC ¶ 2. Plaintiffs further alleged that it was Undine Tsai who had contacted the Jimenez family in person at their home and questioned them regarding “whether any lawyers had come to ask them about the conditions of their unit.” FAC ¶ 46. Notably, this is one of the specific actions Plaintiffs plead as the basis for their retaliation claim. See id. ¶¶ 46, 119, 123, 127. These allegations relate specifically to claims against Undine Tsai, regardless of her ownership interest in the Gilroy Complexes. See Hurd v. Ramona Land Co., 2003 WL 23281593, at *4 (N.D. Cal. Nov. 12, 2003) (holding that an apartment manager could be individually liable to tenant for housing discrimination if it discriminated against the tenant while acting within its authority).

         It is also possible - as Plaintiffs argue - that as the property manager for the Gilroy Complexes, Undine Tsai could be held vicariously liable for the alleged discriminatory actions of Defendant Shang Shen, if Shang Shen was acting as an agent or employee of Undine and David Tsai when he took any such actions. See United States v. Youritan Const. Co., 370 F.Supp. 643, 649 (N.D. Cal. 1973), aff'd in part, remanded in part, 509 F.2d 623 (9th Cir. 1975) (explaining that the “discriminatory conduct of an apartment manager or rental agent is, as a general rule, attributable to the owner and property manager of the apartment complex, ” and holding that a manager may ...

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