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Craw v. Hometown America, LLC

United States District Court, D. Massachusetts

March 21, 2019

BARBARA CRAW, et al., Plaintiffs,
v.
HOMETOWN AMERICA, LLC, et al., Defendants.

          ORDER ON MOTION TO DISMISS (DOC. NO. 29)

          LEO T. SOROKIN UNITED STATES DISTRICT JUDGE.

         On September 25, 2018, plaintiffs Barbara Craw and Joan Shurtleff brought this action in Plymouth Superior Court on behalf of themselves and other similarly situated current and former residents of two manufactured housing communities. Doc. No. 1-1 at 7, 12. The defendants removed the case to this Court on October 15, 2018. Doc. No. 1. On October 31, 2018, the plaintiffs amended their complaint. Doc. No. 10. The Amended Complaint alleges that the defendants unlawfully refused to make necessary repairs to the infrastructure on the homesites of the plaintiffs and the other putative class members, resulting in damage to their homes and dangerous conditions on their homesites. Id. ¶¶ 7-12. On November 21, 2018, the defendants moved to dismiss the Amended Complaint for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Doc. No. 29. The plaintiffs opposed. Doc. No. 44. The Court held a hearing on the motion on February 28, 2019. See Doc. No. 55. After the hearing, plaintiffs and defendants each submitted a supplemental brief at the Court's invitation. Doc. Nos. 57, 58. For the reasons set forth below, the Court DENIES the defendants' motion to dismiss in its entirety.

         I. BACKGROUND[1]

         A. Manufactured Housing in Massachusetts

         Although manufactured housing is sometimes referred to as “mobile homes, ” the latter term is

somewhat misleading. Mobile homes are largely immobile as a practical matter, because the cost of moving one is often a significant fraction of the value of the mobile home itself. They are generally placed permanently in parks . . . A mobile home owner typically rents a plot of land, called a “pad, ” from the owner of a mobile home park. The park owner provides private roads within the park, common facilities such as washing machines or a swimming pool, and often utilities. . . . When the mobile home owner wishes to move, the mobile home is usually sold in place, and the purchaser continues to rent the pad on which the mobile home is located.

Yee v. City of Escondido, Cal., 503 U.S. 519, 523 (1992). As a result, the decisions of a manufactured housing community's owner can have a significant impact not only on residents' quality of life but also on the value of their homes and their ability to resell them. Doc. No. 10 ¶ 36.

         The Massachusetts Manufactured Housing Act, the earliest version of which was adopted in 1939, 1939 Mass. Acts 416, was passed to recognize “that manufactured housing communities provide a viable, affordable housing option to many elderly persons and families of low and moderate income, who are often lacking in resources and deserving of legal protection, ” Greenfield Country Estates Tenants Ass'n, Inc. v. Deep, 666 N.E.2d 988, 990 (Mass. 1996). Its goal was “to avoid discontinuances of manufactured housing communities and to ensure that tenants of such communities are not left at the peril of their landlords due to a practical inability to relocate a manufactured housing unit.” Id. at 992. The Act, which has been amended several times since its passage, “establishes a statutory scheme intended to protect tenants of manufactured housing communities.” Greenfield, 666 N.E.2d at 990; see also Mass. Gen. Laws ch. 140, §§ 32A-32S.

         Among other things, the Act requires a community operator to obtain a license from the city or town where the community is located and to maintain the community free from unsanitary conditions. Mass. Gen. Laws ch. 140, §§ 32A, 32B, 32C. The prohibition on “unsanitary condition[s]” dates to the first version of the Act in 1939. See 1939 Mass. Acts 416. The Act also limits the ability of a community operator to evict a tenant, specifying the only permissible reasons for doing so. Mass. Gen. Laws ch. 140, § 32J. The Act requires a community operator to obtain approval from the Attorney General before imposing community rules, forbidding rules that are “unreasonable, unfair, or unconscionable.” Id. § 32L.

         With a similar goal of protecting state residents, at least as early as 1965, Massachusetts adopted a statute requiring the state's Department of Public Health to “adopt . . . public health regulations to be known as the state sanitary code, which . . . shall deal with matters affecting the health and well-being of the public in the commonwealth.” 1965 Mass. Acts 898. Pursuant to the law, the Department of Public Health has adopted and periodically revised a State Sanitary Code, now codified at 105 Mass. Code Regs. 410. At least as early as 1969, the Sanitary Code has required owners of leased real property to “install and maintain . . . structural elements” of dwellings they own. Doc. No. 42-7 at 7. The 1969 Sanitary Code defined an owner as “every person who . . . has legal title to any dwelling or dwelling unit.” Id. at 4. By 1977, the Department of Public Health had expanded the definition of “owner” to include the owner of a “mobile dwelling unit or parcel of land . . . including a mobile home park.” Doc. No. 42-8 at 6.

         These portions of the Sanitary Code are substantially unchanged today. The current regulations provide that “[e]very owner shall maintain the . . . structural elements of his dwelling so that the dwelling . . . is rodent-proof, watertight and free from chronic dampness, weathertight, in good repair and in every way fit for the use intended.” 105 Mass. Code Regs. 410.500. “Owner means every person who . . . has legal title to any dwelling, dwelling unit, mobile dwelling unit, or parcel of land, vacant or otherwise, including a mobile home park, ” or who “has care, charge or control of” the same “in any capacity, ” while “[d]welling means every building or shelter . . . used or intended for human habitation and every other structure or condition located within the same lot line whose existence causes or is likely to effect noncompliance with the provisions of” the Sanitary Code. Id. 410.020.

         In 1974, Massachusetts Attorney General Robert H. Quinn adopted regulations under the Massachusetts Consumer Protection Act governing the relationship between landlords and tenants generally-i.e., not limited to manufactured housing communities-which remain substantially unchanged today. Massachusetts Department of the Attorney General, “Landlord-Tenant Relationship Regulations” (Sept. 6, 1974) (on file with the Attorney General's Office); see also 940 Mass. Code Regs. 3.17. The regulations, which remain unchanged in relevant part today, define unfair and deceptive landlord practices in areas such as maintenance, rental agreements, security deposits, and eviction. Id.

         In 1983, Massachusetts Attorney General Francis Bellotti issued a document called the “Mobile Home Park Law Guide” that described, among other things, those regulations and their application to manufactured housing communities. Massachusetts Attorney General's Office, Public Protection Bureau (1983), https://archive.org/details/attorneygeneralb00rodd (hereinafter “1983 Guide”). Although the Guide stated that its “purpose is to define the law as clearly as possible, so that both residents and park owners will become aware of their individual rights and their responsibilities to each other, ” it also clarified that it “is not the law, ” but rather “a guide to the law prepared by the Attorney General's Consumer Protection Division.” Id. at 1-2.[2]

         The Guide explained that the “Attorney General has promulgated regulations governing landlord-resident relationships, ” which “specifically pertain to [manufactured homes], the lots they occupy and the park grounds as well.” Id. at 15. Citing state regulations and case law, the document further explained that

         It is a violation of law for the park owner to . . .

a.) Rent premises (i.e., a [manufactured home], the lot it occupies, and/or the park grounds), which at the beginning of the residency are unfit for human habitation, or contain a defect which violates the law or poses a threat to the resident's health, safety, or well-being. 940 CMR 3.17(1)(a). This means that at the inception of the rental there are no latent, i. e. - undiscoverable but existing, defects in facilities vital to the use of the premises for residential purposes and that these essential facilities will remain in a condition which makes the property liv[]able for the duration of the tenancy. [Bos. Hous. Auth. v. Hemingway, 293 N.E.2d 831, 843 (Mass. 1973).]
b.) Fail to maintain the premises in a condition fit for human habitation or fail to substantially remedy the conditions described in (a), above, after receiving written notice that these conditions exist. 940 CMR 3.17[(1)](b). . . .
f.) Fail to comply with the State Sanitary Code within a reasonable time after receiving notice of a Code violation from a resident or agency.

Id. at 15-16. The relevant provisions of the cited regulations remain the same in all material ways today. See 940 Code Mass. Regs. 3.01, 3.17. The 1983 Guide also explained that, while “[c]ertain provisions of the State Sanitary Code are directly applicable to [manufactured homes] and others are applicable by analogy . . . there are still some areas of uncertain application.” 1983 Guide at 17. “The two major areas of concern explicitly covered by the Code are utility and sewage services and preservation of the park premises from generally unsanitary conditions.” Id.

         In 1993, Massachusetts amended the Manufactured Housing Act to authorize the state's Attorney General to “promulgate such rules and regulations as he deems necessary for the interpretation, implementation, administration and enforcement” of the Act. Mass. Gen. Laws ch. 140, § 32S; see also 1993 Mass. Acts 145.[3] In 1996, the Attorney General adopted regulations that remain the same in all material ways today. 798 Mass. Reg. 73 (Aug. 23, 1996); see also 940 Mass. Code Regs. 10.00.

         Three regulations are of particular significance to the pending complaint. First, the regulations make violations of various other specified state statutes and regulations, including the Sanitary Code, a violation of Chapter 93A, provided that the violation concerns a manufactured home. Specifically, the regulations provide that “[a]ny violation of any applicable local, state or federal statute, regulation or ordinance governing landlord-tenant relations (including, but not limited to, M.G.L. c. 186, §§ 12 through 21, M.G.L. c. 111, § 127A, 105 CMR 410.000, local ordinances and rent control laws) with regard to manufactured housing shall constitute a violation of” the Consumer Protection Act, Mass. Gen. Laws ch. 93A. 940 Mass. Code Regs. 10.03(3). Next, the regulations also provide that a manufactured housing community's “operator shall not require any resident to make permanent improvements to the manufactured home site, or the manufactured housing community or any of its facilities, nor assess any separate fee or charge for any such permanent improvements made by the operator.” Id. 10.04(5)(f). Finally, the regulations provide that a lease provision “which releases or limits the operator's liability arising under law or resulting from an act or omission of the operator” is “void and unenforceable.” Id. 10.03(9)(b). The regulations also address community-homeowner lease provisions, certain required disclosures, and a minimum term of five years. See id. 10.03(4), (5).

         In August 2000, Massachusetts Attorney General Tom Reilly issued a document called “The Attorney General's Guide to Manufactured Housing Community Law.” Massachusetts Attorney General's Office (2000), https://archive.org/details/attorneygenera00mass; Doc. No. 42-9. The document explained that conditions in a manufactured housing community are governed by each community's rules, which “must comply with the standards established under the [Manufactured Housing] Act and the Regulations.” Doc. No. 42-9 at 7. The document further explained that, in particular, it “is your community owner/operator's responsibility to repave driveways and sidewalks when necessary, as these are permanent elements of your lot or the community.” Id. The events alleged in the Amended Complaint unfolded subject to the foregoing legal and regulatory framework governing manufactured homes in Massachusetts.

         B. Recent Events

         Defendant Hometown America, LLC (“Hometown”) indirectly owns and manages manufactured housing communities in several states, including in Massachusetts. Doc. No. 10 ¶ 30. Defendant Hometown Oakhill, LLC (“Hometown Oakhill”), an affiliate of Hometown, owns the land on which Oakhill, a manufactured housing community in Attleboro, is located. Id. ¶¶ 7, 30-31. Defendant Hometown America Management, LLC (“Hometown Management”), also Hometown's affiliate, “has represented itself to be the managing agent or beneficial owner of Oakhill.” Id. ¶ 33. In January 2006, Hometown Oakhill, which at that point had existed for less than four months, bought the land on which Oakhill now sits from its former owner for $6.99 million. Id. ¶¶ 46-47. Hometown Oakhill then entered into a management agreement with Hometown Management, obligating the latter to operate Oakhill. Id. ¶ 49.

         Shortly thereafter, plaintiff Barbara Craw began to lease Site 100 at Oakhill and bought the manufactured home at that site. Id. ¶ 51. During Craw's first year at Oakhill, Site 100 routinely flooded during and after rain, regularly covering the driveway and cement walkways built into the site, often inundating the site's side yard, and sometimes reaching the crawlspace under Craw's home. Id. ¶ 53. The flooding created dangerous conditions on the site, routinely covering the driveways and walkways, requiring Craw and her infant son to cross ankle-deep water to reach their home, and rotting out the front step of Craw's porch. Id. ¶¶ 56-57. Craw promptly complained about the flooding to Tammy Feeney, Oakhill's community manager, who said the flooding resulted from “anomalous weather conditions.” Id. ¶ 54. However, the flooding remained the same from year to year. Id. ¶ 55.

         Meanwhile, the flooding at Craw's Oakhill homesite continued. In November 2009, in response to Craw's continued complaints about the flooding on Site 100, community manager Feeney caused a channel drain and catch basin to be installed on or near the site. Id. ¶ 58. Although the improvements reduced the flooding, water continued to inundate the driveway and cement walkways, which began to crack and crumble. Id. ¶ 59. As a result, in May 2010, Craw suggested to Feeney that the site's permanent elements, such as the cement around Craw's home or the driveway, needed to be re-graded or otherwise improved. Id. ¶ 60. She also requested that Feeney arrange for the cement walkways to be repaired. Id. ¶ 61. Feeney told Craw that Oakhill was not responsible for such improvements and repairs. Id. ¶ 62.

         In response, Craw began withholding her home-site rent until Oakhill made the repairs she had requested. Id. Craw then received a letter from an attorney representing Hometown, stating that her concerns had been caused by anomalous weather, that Oakhill management had resolved Craw's concerns, that Craw bore responsibility for remedying any remaining concerns, and that Craw would be evicted if she continued to withhold rent. Id. ¶ 64. Scared by the possibility of eviction, Craw resuming paying rent to Hometown even though the water problems at her site continued. Id. ¶¶ 65-66. Thereafter, Craw continued raising her concerns with Josephine Santa Fe, who replaced Feeney as Oakhill's community manager, and with Kyle Howieson, Hometown's regional manager. Id. ¶ 69.

         In November 2011, Defendants Hometown Oak Point I, LLC and Hometown Oak Point II, LLC (collectively “Hometown Oak Point”), also affiliates of Hometown, bought the land on which Oak Point, a manufactured housing community in Middleborough, is located. Id. ¶¶ 7, 74- 75. Hometown Oak Point, which at that point had existed for less than one month, bought Oak Point from its former owners for more than $55 million. Id. ¶¶ 74-75. Hometown Oak Point then entered into a management agreement with Hometown Management, obligating the latter to operate Oak Point. Id. ¶ 77. Hometown Management “has represented itself to be the managing agent or beneficial owner of . . . Oak Point.” Id. ¶ 33.

         At the time of Hometown Oak Point's purchase of Oak Point, plaintiff Joan Shurtleff already lived at 3105 Fox Run in Oak Point, which she had begun renting no later than 2008. Id. ¶¶ 30, 95-96. For years, Shurtleff has complained to Oak Point management about water that routinely accumulates around her home after rain, but management has not remedied the problem. Id. ¶ 97. Although management initially made minor repairs, it eventually began telling Shurtleff that repairs were her responsibility. Id. ¶¶ 98-99.

         No later than 2012, Fred Taylor, Oak Point's then-general manager, and Peter Conant, its community manager, were aware of the water drainage problems at various Oak Point residents' homesites caused by improperly maintained permanent improvements at those sites. Id. ¶ 79. At residents' request, Taylor or Oak Point's office manager Debbera Silva would agree to make minor repairs to homesites, such as the installation of an extra drain, to ameliorate these concerns. Id. ¶ 81. However, by 2015, Oak Point management, including its general manager Doreen Lang, began telling residents that the flooding and necessary repairs were residents' responsibility. Id. ¶ 83. Management also told residents they were responsible for other homesite infrastructure such as walkways, driveways, and underground sprinkler systems. Id. ¶ 84.

         In November 2017, Massachusetts Attorney General Maura Healey issued a revised version of “The Attorney General's Guide to Manufactured Housing Community Law.”[4]Although the underlying law had not changed, the revised version of the guide included a somewhat different statement about community owners' maintenance responsibilities than those in the earlier Guides. It states that it “is your community owner/operator's responsibility to maintain, repair, and replace the cement slab under your home as well as any lamp posts on your homesite and repave driveways and sidewalks when necessary, as well as any other permanent elements of your lot or the community.” Id. at 14.

         In August 2018, after a series of rent increases, Craw asked to review the five-year lease agreement that Oakhill, at that point, offered to new tenants. Id. ¶ 71. The template lease agreement provided that “improvements located on the homesite at the initiation of this Agreement such as concrete surfaces, if any, trees and other fixtures are to be maintained by RESIDENT during the period of RESIDENT's tenancy.” Id. ¶ 73.

         On April 30, 2018, after the U.S. Department of Housing and Urban Development (“HUD”) opened an inquiry into conditions at Oak Point because of residents' complaints, Conant told a meeting of the Town of Middleborough's Board of Selectmen that Hometown would take responsibility for remediating the water accumulation problem at Oak Point homesites. Id. ¶¶ 85-87. However, after HUD announced that its inquiry was limited to the approximately 11 percent of Oak Point homesites installed after 2011, Hometown retracted Conant's statement, claiming that it was not responsible for infrastructure at the other 89 percent of homesites because it was installed before Hometown owned Oak Point. Id. ¶ 88. Howieson repeated that denial of responsibility at a July 23, 2018, meeting of the Board of Selectmen, specifically claiming that the Manufactured Housing Act does not assign responsibility for maintenance of a homesite's pad to a community's owner. Id. ¶ 89. He further stated that the Attorney General's Guide to Manufactured Housing Community Law “isn't the law” but rather is just “someone's interpretation of the law.” Id. ...


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