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Holland v. The Related Companies, Inc.

United States District Court, N.D. California

July 20, 2017

PETER HOLLAND, et al., Plaintiffs,
v.
THE RELATED COMPANIES, INC., et al., Defendants.

         NOT FOR CITATION

          ORDER GRANTING, IN PART, AND DENYING, IN PART, MOTION FOR SUMMARY ADJUDICATION OF ISSUE RE PUNITIVE DAMAGES; GRANTING DEFENDANTS MOTION IN LIMNINE NO. 1; AND GRANTING, IN PART, DEFENDANTS' MOTION IN LIMINE NO. 4. RE: DKT. NOS. 98, 196, 199

          JEFFREY S. WHITE UNITED STATES DISTRICT JUDGE

         On July 11, 2016, the Court granted, in part, the motion for partial summary judgment filed by Defendants, Related Management Company L.P. (“RMC”) and Third and Mission Associates LLC (“TMA”) (collectively “Defendants”). The Court deferred ruling on the issue of whether Plaintiffs are entitled to punitive damages, and it ordered supplemental briefing on the issue. The parties have made efforts to settle this matter short of trial but, to date, those efforts have not succeeded. For the following reasons, the Court GRANTS, IN PART, AND DENIES, IN PART, Defendants' motion for summary adjudication.

         On July 17, 2017, Defendants filed a motion in limine to bifurcate the issue of punitive damages (“first motion in limine). Plaintiffs do not oppose that motion. In light of the Court's ruling on Defendants' motion for summary adjudication on punitive damages, the Court GRANTS Defendants' first motion in limine.

         Defendants also filed a motion in limine to exclude, inter alia, evidence regarding a lawsuit filed in the United States District Court for the Southern District of New York and a Consent Decree entered in that case (“fourth motion in limine). For the reasons set forth below, the Court GRANTS, IN PART, Defendants' fourth motion in limine. If the parties are unable to resolve this matter at the settlement conference scheduled for July 24, 2017, the Court will address the remaining issues in that motion at the pre-trial conference.

         BACKGROUND

         In November 2008, Plaintiffs, Peter Holland (“Mr. Holland”) and Kristin Holland (“Mrs. Holland”) (collectively “Plaintiffs”) leased unit 7C in The Paramount apartment complex (“The Paramount”). Unit 7C is a 630 square foot studio apartment. (Declaration of Deborah Lunn (“Lunn Decl.”), ¶ 3.) In December 2014, Plaintiffs renewed their lease for a period of one year. (See First Amended Complaint (“FAC”), ¶¶ 6, 9-10, 12; RMC Amended Answer to FAC (“RMC Answer”) ¶¶ 1, 6, 9-10, 12; TMA Amended Answer to FAC (“TMA Answer”) ¶¶ 1, 6, 9-10, 12; see also Lunn Decl., ¶ 3.) The Paramount is a residential apartment complex owned by TMA and operated by RMC. (FAC ¶¶ 6-7; RMC Answer ¶¶ 6-7; TMA Answer ¶¶ 6-7; Declaration of Warren Loy (“Loy Decl.”), ¶ 2; see also Lunn Decl., ¶ 2.)

         In January 2015, Defendants sent a notice to The Paramount's residents that the building's amenities space, which was located on the floor below Plaintiffs' apartment, would be renovated. That project commenced in March 2015. (RMC Answer ¶¶ 13, 15; TMA Answer ¶¶ 13, 15; Declaration of Connie Cortese (“Cortese Decl.”), ¶ 2; Lunn Decl., ¶ 5.)

         Mr. Holland suffers from Post-Traumatic Stress Disorder (“PTSD”). On March 12, 2015, Mr. Holland called Connie Cortese, one of The Paramount's leasing agents, to inquire how long the noise from construction would continue. (Cortese Decl., ¶ 3; Declaration Celia McGuinness (“McGuiness Decl.”), ¶ 7, Ex. 5.) In an email to Jessie Leite (“Mr. Leite”), The Paramount's resident manager at the time, Ms. Cortese stated that “I know you have spoken with his wife numerous times about this remodel. … Their biggest issue is how long this noise is going to last. As you know he is a vet and a lawyer, he doesn't want to go there but will if needed.” (Cortese Decl., ¶ 3, Ex. A.) Ms. Cortese attests that she directed Mr. Leite to provide Plaintiffs with information about the construction schedule and attests that Mr. Leite told her he complied with that request. (Id., ¶ 3.)

         On April 1, 2015, Mr. Holland spoke with Tanya Noeggerath Brown by telephone about the construction noise. (Declaration of Lyn Agre dated June 17, 2016 (“6/17/16 Agre Decl.”), ¶ 6, Ex. E (Email String at Related 000139).) On that same day, Ms. Brown sent an email to Richard Crane, an RMC District Manager, and Tom Kearns, an RMC Vice President of Leasing, and reported that Mr. Holland offered three options to address the noise issue, which he stated was triggering his PTSD: “(1) Rent concession; (2) Move to comparable apartment with the same rent that he is paying now; or (3) Seek legal counsel.” (6/17/16 Agre Decl., ¶ 3, Ex. D; see also id., Ex. B (Deposition of Tanya Noeggerath Brown (“Brown Depo.”) at 50:24-52:14, 125:23-172:1).)

         In the email to Mr. Crane and Mr. Kearns, Ms. Brown stated that she advised Mr. Holland that

we do not have a comparable apartment to move him and his family into. He said that was unacceptable. I asked him to come up with a number for rent concession. He said he needed to think about it. … I will follow up tomorrow. He kept saying how unfortunate this was and that it was the landlord's responsibility to provide the right of quiet enjoyment to the residents and this was not happening. This may need to go further than me. Let me know what you think. I will circle back when I get a number from him.

(6/17/16 Agre Decl., ¶ 5, Ex. D.) Ms. Brown testified that she believed she reviewed the inventory of available apartments at the time she was speaking with Mr. Holland, and that she believed when she said “comparable” she meant similar square footage to their current unit. (6/17/16 Agre Decl., Ex. B (Brown Depo. at 128:19-130:10).)

         Ms. Brown testified that Mr. Holland told her the noise was causing him pain and stated she believed him. (McGuiness Decl., Ex. A (Brown Depo. at 84:2-14).) Ms. Brown testified Defendants did not offer a rent concession, because they “were trying to find a solution to get him away from the noise.” (6/17/16 Agre Decl., Ex. B (Brown Depo. at 51:20-52:22).) There is evidence in the record that suggests the noise from the construction could be heard on the upper floors of The Paramount. (See 6/17/16 Agre Decl., Ex. E (Email string at Related 000138), Ex. F (Deposition of Deborah Lunn (“Lunn Depo.”) at 253:18-25.)

         On April 8, 2015, Mr. Holland sent an email to Ms. Brown and stated:

Essentially, I offered to move my family within the building to another unit of comparable square footage, paying our current rate of rent, for a time and on terms to be further negotiated. We would then agree to hold Related harmless for all damages. You informed me that Related corporation rejected this offer. You also informed me of their unacceptable accord and satisfaction counter-offer. … I must now revoke any and all offers, stated or implied, made to resolve this situation. Please let me know if you are prepared to accept service of process on behalf of Related [C]orporation.

(6/17/16 Agre Decl., Ex. C; McGuiness Decl, Ex. 8.) On April 10, 2015, in response to Ms. Brown's offer to put him in touch with their legal counsel, Mr. Holland sent an email and stated he could “think of no good reason to speak to opposing counsel now. … I made you a good-faith offer of compromise that was both fair and reasonable. Your employer immediately rejected it out of hand[.] … Negotiations have, therefore, concluded.” (6/17/16 Agre Decl., Ex. C.)

         On April 10, 2015, Ms. Lunn sent an email to Leslie Torres in RMC's New York compliance office and notified Sherry Scurfeld, RMC's Fair Housing officer, of Plaintiffs' complaints. (Lunn Decl., ¶ 6, Ex. A; see also McGuinness Decl., Ex. 11.) Ms. Torres forwarded the email to Ms. Scurfeld. (McGuiness Decl., Ex. 11.) Ms. Lunn advised Ms. Torres that they offered Plaintiffs: a $2000.00 rent concession; release from their lease with no-penalty and up to $2, 000.00 in moving expenses; and provision of a hotel room in the vicinity from Monday through Friday “until the end of April when the demo will be complete that he could work from and bring his daughter with him.” (Lunn Decl., ¶ 6, Ex. A.)[1] Ms. Lunn stated that Plaintiffs wanted “a comparable apartment for the same [rental] rate ... (large studio for $2, 795), ” and she advised Ms. Torres that “there are only 1BRs available starting at $3, 825.” (Id.) Ms. Lunn then asked: “Please advise if there is anything else that you feel we should be offering him?” (Id.)

         Defendants have a written policy entitled “Processing Requests for Reasonable Accommodations and Modifications Under the Fair Housing Act” (hereinafter “FHA Policy”). (Loy Decl., ¶ 6, Ex. A (excerpt of FHA Policy); McGuinness Decl., ¶ 13, Ex. 12.)[2] Defendants' FHA Policy states:

An understanding of the scope of the Act is necessary to assure compliance, particularly in the area of reasonable accommodations and modifications. The following procedures have been developed to facilitate the handling of requests. Following these procedures consistently is imperative to assure our compliance with the regulations and to avoid any potentially discriminatory actions. Each employee is required to be familiar with the procedures and to understand and carry out his/her responsibility in the process, whether by directing residents/applications or employees to the appropriate resource on staff or by carrying out the process.

(FHA Policy at 1.) Based on the terms of the FHA Policy, it appears that site and regional staff would have authority to grant some requests for accommodations. However, “[s]ite and regional staff are not authorized to deny or modify any request. All recommendations to deny or to modify requests must be forwarded for review by Compliance and/or the Fair Housing Office or a designee.” (Id. at 2 (emphasis in original); see also Id. at 5, 7.)

         In May 2015, the parties exchanged demand letters. (Lunn Decl., ¶¶ 8-9, Exs. B-C.) On July 10, 2015, Plaintiffs filed their complaint and alleged Defendants violated, inter alia: (1) the Fair Housing Amendments Act, 42 U.S.C. sections 3601, et seq. (the “FHAA Claim”); (2) California's Fair Employment and Housing Act, Government Code sections 12926, et seq. (the “FEHA Claim”); and (3) California's Disabled Persons Act, Civil Code sections 54, et seq..

         Plaintiffs also filed a motion for a preliminary injunction. (Docket No. 4.) On July 23, 2015, the Court granted Plaintiffs' motion for a preliminary injunction, and it ordered Defendants to “make a reasonable accommodation to Plaintiffs by moving them to an upper apartment in their building, free of construction noise, for the duration of their lease at their current rental rate.” The Court also ordered Defendants to pay “the reasonable costs of such relocation.” (Docket No. 31, Order Granting Motion for Preliminary Injunction at 5:25-6:2.) Defendants moved Plaintiffs, in compliance with the Court's Order, and Plaintiffs moved out of The Paramount in December 2015. (Lunn Decl., ¶ 3.)

         The Court will address additional facts as ...


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