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Baker v. Equity Residential Management, L.L.C.

United States District Court, D. Massachusetts

July 1, 2019

RACHELLE BAKER and JASON DITTMANN, individually and on behalf of all others similarly situated, Plaintiffs,
v.
EQUITY RESIDENTIAL MANAGEMENT, L.L.C., and EQR-WALDEN PARK, LLC, Defendants.

          MEMORANDUM AND ORDER

          Hon. Patti B. Saris Chief United States District Judge.

         INTRODUCTION

         Plaintiffs Rachelle Baker and Jason Dittmann bring this class action lawsuit against the owner and manager of their former apartment complex (“Walden Park”), Defendants Equity Residential Management, L.L.C. and EQR-Walden Park, LLC (collectively, “Equity”). They claim Equity failed to provide adequate heat and hot water systems and undertook an unnecessarily disruptive construction project to attempt to fix the systems. On behalf of other tenants in the apartment complex, they allege that Equity breached the implied covenant of quiet enjoyment and implied warranty of habitability, was unjustly enriched, and violated Mass. Gen. Laws ch. 93A. Before Equity removed the case to federal court, the state court certified two classes. Equity moves to decertify these classes for failure to satisfy Federal Rule of Civil Procedure 23(b)(3)'s predominance requirement. Equity also moves for summary judgment on the quiet enjoyment and Chapter 93A claims.

         After hearing, the Court ALLOWS IN PART and DENIES IN PART Equity's motion to decertify (Docket No. 36) and DENIES Equity's motion for summary judgment (Docket No. 38).

         FACTUAL BACKGROUND

         The following facts are undisputed unless otherwise indicated.

         I. Walden Park's Heat and Hot Water Problems

         Located in Cambridge, Massachusetts, Walden Park consists of two adjacent buildings (205 Walden Street and 225 Walden Street) with 231 apartments of different sizes and layouts. Equity purchased Walden Park, which was about fifty years old at the time, in late 2011. When it purchased Walden Park, Equity prepared a capital improvement plan of maintenance projects it anticipated completing over a ten-year period. The plan included replacing valves in each apartment to better control the flow of heat and hot water.

         Baker and Dittman rented Apartment 1L at 225 Walden Street from April 2011 (a few months before Equity purchased the complex) until March 2016. While they lived at Walden Park, they experienced repeated heat and hot water outages. Between November 2011 and March 2014, they notified Equity at least eighteen times of an issue with heat or hot water. Equity responded to only some of their complaints. Baker and Dittman also made a number of complaints to the Cambridge housing inspector. Because of the heat and hot water issues, they used a space heater provided by Equity for at least a year starting in the fall of 2013 and warmed water on the stove to use to bathe. They never withheld rent, but they managed to negotiate their rent to stay the same each time they renewed their annual lease. They did not move out despite the heat and hot water problems because of the proximity of the apartment to Dittman's work and the expense of moving.

         The heat and hot water problems were not limited to Baker and Dittmann's apartment. Between November 2011 and March 2014, Equity received hundreds of complaints from other Walden Park tenants about insufficient heat and hot water. Equity was also cited by the Cambridge housing inspector for failing to provide adequate heat and hot water on at least one occasion.

         II. “Admitted Outages” of Heat and/or Hot Water

         On forty-six days between April 12, 2012 and April 24, 2014, Equity sent emails to the Walden Park tenants about building-wide utility issues. Twenty-seven of these “admitted outages” concerned issues in both Walden Park buildings, while nineteen involved only 225 Walden Street. These emails referenced many different types of outages. Some outages involved both heat and hot water, others just one or the other (or water more generally). Equity's own maintenance projects caused some of the outages, while others were attributable to failing equipment, emergencies, or factors beyond Equity's control (such as city utility work or a tenant accidentally flipping a switch outside the boiler room). Some emails provided notice of a day-long outage, others of a brief outage. Some explained that an outage may occur, others that an outage already occurred. In one June 2012 email, Equity acknowledged it had shut off the heat in anticipation of the summer but agreed to turn it back on due to the unseasonably cold weather.

         III. Maintenance Projects

         Equity undertook three major maintenance projects at Walden Park. First, from April 2012 through May 2013, Equity converted the boilers from oil to natural gas (the “Conversion Project”). Equity notified its tenants that this project would reduce heat and hot water outages, but an Equity employee testified that the purpose of the project was to save money.

         After receiving a number of complaints about the heat during the winter of 2012-2013, Equity commissioned a report from R.W. Sullivan on Walden Park's heating systems. R.W. Sullivan provided Equity with its recommendations for improving the systems on May 13, 2013. Equity immediately began maintenance work to implement some of R.W. Sullivan's recommendations, which continued until the fall (the “Heat System Modification Project”).

         On July 3, 2014, Equity notified the Walden Park tenants that it was starting a project the following week to replace leaking heat pipe risers in every apartment to improve the heating systems. This “Riser Replacement Project” involved replacing two pipes in the walls of each apartment, but the exact nature of the construction depended on the layout of the apartment. The email explained that contractors would have to open the wall in one or two corners of each apartment to access the pipes and that tenants would have to move their furniture away from these corners. The work would take place in each apartment over five to seven nonconsecutive days. Equity informed the tenants that it would not be able to tell them in advance when the contractors would be working in each apartment. The Riser Replacement Project lasted until September.

         During the Riser Replacement Project, a number of tenants contacted Equity about the construction. Some asked about the schedule or requested that contractors finish up quickly or not enter an apartment on a certain day. Others made a wide variety of complaints about the construction. See Dkt. No. 75-3 at 29 (complaining that the contractors twice left his air conditioning unit on after finishing work in his apartment); id. at 42-43 (explaining that the contractors left her apartment dirty multiple times, locked her out, and interfered with her infant's sleeping schedule); id. at 74 (mentioning the thick layer of dust, exposed nails, cracked baseboards, and cockroaches in her apartment).

         Plaintiffs' attorneys, who had filed this lawsuit the year prior, contacted Equity about these disruptions. After urging from the state court, Equity agreed to provide a two-week window for each apartment during which the construction would occur, address reasonable objections from tenants to the timeframe provided, and give ongoing construction updates. Plaintiffs allege that Equity did not fulfill these promises.

         PROCEDURAL HISTORY

         Plaintiffs filed suit against Equity in Middlesex Superior Court on August 15, 2013 on behalf of a class of Walden Park tenants. The complaint raises five causes of action: willful and intentional violation of Mass. Gen. Laws ch. 186, § 14 (Count I), breach of the implied covenant of quiet enjoyment (Count II), breach of the implied warranty of habitability (Count III), unjust enrichment (Count IV), and violation of Mass. Gen. Laws ch. 93A, §§ 2, 9 (Count V). Equity removed the case to federal court on the basis of diversity jurisdiction under the Class Action Fairness Act of 2005 (“CAFA”). On Plaintiffs' motion, the court (Collings, J.) remanded the case to state court for failure to satisfy CAFA's $5 million amount-in-controversy requirement. See Baker v. Equity Residential Mgmt., L.L.C., 996 F.Supp.2d 1, 8 (D. Mass. 2014).

         Back in state court, Equity moved for partial summary judgment. On August 5, 2016, the state court granted Equity summary judgment on Count I because Equity's communication with its tenants when there were problems belied the notion that its failure to provide heat and hot water was willful or intentional. The state court rejected Equity's argument that Baker and Dittmann could not recover for breach of the implied warranty of habitability because they did not withhold rent. Finally, while the state court recognized that Baker and Dittmann could not receive a double recovery via their unjust enrichment claim, they could continue to pursue this claim as an alternative theory of relief.

         Plaintiffs moved for class certification under Massachusetts Rule of Civil Procedure 23 after the close of fact discovery. On June 27, 2017, the state court certified the following two classes:

Conversion Class: “all persons who were tenants occupying either building during the Conversion Project (May 1, 2012 through May 30, 2013), the Heating System Modification Project (July 1, 2013 through December 31, 2013), and/or the Riser Replacement Project (July 7, 2014 through September 30, 2014)”; and Admitted Outage Class: “all persons who were tenants in either building on any of the 27 dates for which [Equity has] admitted outages, and all persons who were tenants in 225 Walden Street on any of the 19 dates for which [Equity has] admitted outages in that building only.”

Dkt. No. 1-4 at 3-4, 9. The court held that Walden Park's 231 apartment units met the numerosity requirement and that the classes satisfied commonality because all the alleged outages affected at least one of the buildings in its entirety. Plaintiffs were typical and adequate class representatives because they were standard occupants of Walden Park and able and willing to represent their fellow tenants. As to predominance and superiority, the court noted that class members may have suffered individualized damages but that liability was based on common questions. For the same reasons, the court certified the classes for their Chapter 93A claim.

         On May 30, 2018, Plaintiffs produced an expert report alleging classwide damages of up to $10 million. Based on this report, Equity removed the case to federal court under CAFA for the second time on June 5, 2018. Plaintiffs moved to remand on the basis of untimeliness, arguing that Equity could have figured out that damages exceeded $5 million before receiving their expert report. Baker v. Equity Residential Mgmt., L.L.C., 318 F.Supp.3d 440, 441-42 (D. Mass. 2018). This Court denied the motion to remand. Id. at 442.

         Equity filed two motions after the close of expert discovery. Equity seeks decertification of the classes and summary judgment on Count II (implied ...


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