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Ortins v. Lincoln Property Co.

Superior Court of Massachusetts, Essex

August 9, 2019

Matthew ORTINS et al.[1]
v.
LINCOLN PROPERTY CO. et al.[2]

          MEMORANDUM OF DECISION AND ORDER ON THE PARTIES’ CROSS MOTIONS FOR SUMMARY JUDGMENT

          C. William Barrett, Justice

          INTRODUCTION

          In this case, the plaintiffs, Matthew Ortins and Olivia Savarino (collectively, the "Plaintiffs"), assert claims against the defendants, Lincoln Property Co. ("Lincoln Property"), Salem Station, LLC ("Salem Station"), and Lincoln Apartment Management, LP ("Lincoln Management") (collectively, the "Defendants"), on their own behalf and on behalf of a class of similarly situated persons. In particular, the Plaintiffs contend Lincoln Property and its affiliate, Lincoln Management, intentionally charged prospective tenants of properties they manage in Massachusetts application fees and lock and key fees in violation of the Massachusetts Security Deposit Law, G.L.c. 186, § 15B (Count I and III), and that these charges constitute per se violations of G.L.c. 93A ("Chapter 93A") (Count II and IV). This matter is currently before the court on the Defendants’ Motion For Summary Judgment (Paper No. 47) and the Plaintiffs’ Motion For Summary Judgment (Paper No. 48). For the reasons explained below, the Defendants’ Motion is DENIED and the Plaintiffs’ Motion is ALLOWED in part and DENIED in part.

          BACKGROUND

          The Plaintiffs filed the Complaint (Paper No. 1), on July 14, 2014, alleging Lincoln Property and Salem Station charged tenants and prospective tenants application fees and lock and key fees, i.e., re-key fees, above the actual cost of a new lock and key, in violation of the Security Deposit Law and Chapter 93A.[3] There followed a number of disputes between the parties regarding various discovery matters.

         On February 2, 2017, the Defendants filed the Motion For Protective Order (Paper No. 11), which the court (Lauriat, J.) allowed, without prejudice, on March 1, 2017, stating "[c]lass certification not yet being heard or determined, the requested discovery is presently limited to the property in which the named plaintiffs are involved." Thereafter, on March 22, 2017, the Plaintiffs served the Defendants with the Motion To Compel Production Of Documents And MRCP 30(b)(6) Deponents (Paper No. 13), which limited the documents the Plaintiffs were requesting "to the property in which the named plaintiffs are involved."

          After two hearings and a number of submissions by the parties, on June 30, 2017, corrected by order dated July 7, 2017, the court (Tabit, J.) issued the Order Of The Court Relevant To Lincoln Property Company, Salem Station, LLC, And Lincoln Apartment Management, LP (the "Discovery Order") (Paper No. 26), ordering the Defendants to produce within sixty days various categories of documents relative to the "Subject Properties,"[4] including: the management agreements for these properties; documents showing which tenants paid application fees and re-key fees, the amounts paid, and the actual cost of all lock changes or new keys; bank records evidencing the depositing and transferring of application fees and re-key fees; and any documents describing policies or guidelines for charging application fees and re-key fees. J.A., Ex. T.

          On September 21, 2017, shortly before the expiration of the sixty-day deadline set forth in the Discovery Order, the Defendants filed the Motion For Reconsideration Of Court Order Dated 6/30/2017 (Paper No. 30). In response, the Plaintiffs filed the Opposition To Defendants’ Motion For Reconsideration And Request for Sanctions (Paper No. 30.1), requesting that the court issue sanctions against the Defendants based on their failure to comply with the Discovery Order. On September 26, 2017, the court (Tabit, J.) issued the Memorandum And Decision On Defendants’ Motion For Reconsideration Of The Court’s Discovery Order (Paper No. 32), denying the motion and directing the Defendants to "produce all documents responsive to th[e] court’s 06/30/17 order and the court’s 07/07/17 corrected order by 10/05/17." Therein, for the second time, the court ordered the Defendants to conduct a diligent search of their records, including electronically stored information, and produce documents responsive to the categories outlined in the Discovery Order. The court took no action relative to the Plaintiffs’ request for sanctions.

          On October 31, 2017, the court (Tabit, J.) issued the Memorandum And Order On Plaintiffs’ Motion For Class Certification (Paper No. 34), granting certification to a class of plaintiffs defined to include "[a]ll individuals who paid rent application fees and lock and key fees to [Lincoln Property] or [Lincoln Management] in the Commonwealth of Massachusetts[,]" including "all tenants or perspective [sic] tenants of Jefferson, at Salem Station, who paid such fees." J.A., Ex. S. In addition, therein, the court formally appointed Ortins and Savarino to represent the class.

          On December 28, 2017, the Plaintiffs filed the Motion For Sanctions Against All Defendants (Paper No. 36). J.A., Ex. U. The court (Tucker, J.) conducted hearings relative to this motion on March 1, 21, and 27, 2018. Following the hearing on March 1st, the court deferred ruling on the Motion For Sanctions in order to grant the Defendants "additional time to make further diligent searches for documents and records, both in paper and electronic form, in response to plaintiffs’ request." J.A., Ex. V. The court also "admonished" Defendants for failing to comply with the Discovery Order, stating they were "required to fully comply with [the Discovery Order] or set forth by sworn affidavit the reasons for non-production." J.A., Ex. V.

          On March 30, 2018, the court issued the Order On Plaintiffs’ Motion For Sanctions (the "Sanction Order") (Paper No. 41), concluding the Plaintiffs were entitled to reasonable attorneys fees, and sanctioning the Defendants for their willful non-compliance with the Discovery Order and/or spoliation of evidence. J.A., Ex. V. More specifically, as a sanction for their discovery violations, the court ordered that the Defendants were "precluded from attempting to rebut" certain factual assertions, including:

a) That [Lincoln Property] and [Lincoln Management] were the property managers at no less than 27 apartment complexes, totaling no less than 6,500 residential units during the time period of July 8, 2010 to date (hereinafter "the Time Period");
b) That during the Time Period, [Salem Station] owned and managed 266 apartments[sic] units;
c) That the defendants [Lincoln Property], [Lincoln Management], and [Salem Station] charged tenants a $250 application fee and a $150 rekey fee on new leases executed during the Time Period; and
d) The defendants [Lincoln Property], [Lincoln Management], and [Salem Station] possess no documents that establish the actual cost of new lock and key changes.

          These unrebuttable assertions establish the undisputed material facts for purposes of the pending summary judgment motions. To the extent additional relevant facts apply, the court will address those facts during its discussion of the parties’ arguments.

          DISCUSSION

          The Plaintiffs contend they are entitled to judgment as a matter of law for two reasons. First, on their claims for violation of the Security Deposit Law (Counts I and III), the plaintiffs assert that charging an application fee and any amount other than the actual cost of the purchase and installation of a lock constitutes a violation of the Law. Second, the Defendants’ violations of the Security Deposit Law constitute per se unfair and deceptive acts or practices in violation of Chapter 93A (Counts II and IV). Additionally, the Plaintiffs argue that the Defendants’ conduct was "knowing and willful," entitling them as a matter of law to an award of double or treble damages under Chapter 93A.

          The Defendants argue judgment should enter in their favor on the claims for violation of the Security Deposit Law. Lincoln Property and/or Lincoln Management claim they cannot be liable for violation of the Security Deposit Law because it only applies to property owners, not managers. In addition, they join with Salem Station in arguing that the Security Deposit Law does not bar the fees at issue in this case. Finally, the Defendants argue that, if the court decides they are not liable for violation of the Security Deposit Law, the claims for violation of Chapter 93A (which are, based entirely on violation of that Law) also fail. Alternatively, if the court decides they are liable for violation of the Security Deposit Law, the Defendants contend entry of judgment on the claims for violation of Chapter 93A is inappropriate because issues of fact remain concerning whether their conduct was willful and knowing.

          I. Standard of Review

         A motion for summary judgment may be granted if "there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law." Mass.R.Civ.P. 56(c); see also Barrows v. Wareham Fire Dist., 82 Mass.App.Ct. 623, 625 (2012), citing Cassesso v. Commissioner of Corr., 390 Mass. 419, 422 (1983). The party opposing a request for summary judgment must respond and allege specific facts establishing the existence of a genuine issue of material fact for trial. Polaroid Corp. v. Rollins Envtl. Servs. (N.J.), Inc., 416 Mass. 684, 696 (1993). The court views the evidence in the light most favorable to the nonmoving party, but does not weigh evidence, assess credibility, or find facts. Drakopoulos v. United States Bank Nat’l Ass’n, 465 Mass. 775, 788 (2013), quoting O’Connor v. Redstone, 452 Mass. 537, 550 (2008).

          II. Analysis

          A. The ...


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