George v. Overall Creek Apartments, LLC

1

CYNTHIA GEORGE, Plaintiff, v. OVERALL CREEK APARTMENTS, LLC; CHANDLER PROPERTIES, LLC; B.L. BENNETT & ASSOCIATES, INC.; DENHOLTZ 5150 JB OWNERF, LLC; BBS TAFT 5150 JB OWNER; and CPJB DRIVE OWNER, LLC, Defendants, and OVERALL CREEK APARTMENTS, LLC and CHANDLER PROPERTIES, LLC, Third-Party Plaintiffs, v. NILES BOLTON ASSOCIATES, INC., Third-Party Defendant.

Civil Action No. 3:23-CV-00297

United States District Court, M.D. Tennessee

April 9, 2024

MEMORANDUM OPINION AND ORDER

ALETA A. TRAUGER UNITED STATES DISTRICT JUDGE

This matter is before the court on Third-Party Defendant Niles Bolton Associates, Inc.'s (“NBA”) Motion to Dismiss (Doc. No. 52) Third-Party Plaintiffs Overall Creek Apartments, LLC and Chandler Properties, LLC's Third-Party Complaint. For the reasons set forth herein, the court will GRANT in part and DENY in part NBA's Motion to Dismiss.

I. BACKGROUND

This is an action brought by Plaintiff Cynthia George against several entities for violations of the Fair Housing Act (“FHA”). (Doc. No. 1, at 11-12).^[1] According to her Complaint, Plaintiff visited Overall Creek Apartments located at 5150 Jack Byrnes Drive in Murfreesboro, Tennessee (“the Property”), where she looked at apartment units. (Id. at 7). During her visit, Plaintiff, who uses a wheelchair, “observed and encountered accessibility barriers that would interfere with her ability to access and use the facilities.” (Id. at 2 7).

On March 31, 2023, Plaintiff filed suit against the Property's “previous owner”, Overall Creek, LLC (“Overall Creek”), as well as Overall Creek's current co-owners and two of its codevelopers, Chandler Properties, LLC (“Chandler Properties”) and B.L. Bennett & Associates, Inc. (Id. at 1, 3-4).^[2] Plaintiff alleges, specifically, that Defendants violated the FHA, Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988, 42 U.S.C. §§ 3601-3619, for failing to “design and/or construct apartments with accessible and useable features for” disabled individuals. (Id. at 8-10 (referring to Defendants' specific violations under §§ 3604(f)(1)-(f)(2), (f)(3)(C)).

In September of 2023, Overall Creek and Chandler Properties, pursuant to Rule 14 of the Federal Rules of Civil Procedure, moved the court for leave to file a third-party complaint against NBA to assert claims for equitable indemnification, equitable contribution, and breach of contract. (Doc. No. 38, at 1-2). The court granted Overall Creek and Chandler Properties' motion as unopposed. (Doc. No. 42). In their Third-Party Complaint, Overall Creek and Chandler Properties allege that NBA-“the architect for the design and construction of the Property”- had a duty to ensure that the Property was constructed in compliance with the FHA. (Doc. No. 43, at 3-4). They further allege that they relied on NBA's expertise “to design the Property to be compliant with all applicable codes, rules, and regulations.” (Id.). To the extent that Overall Creek and Chandler Properties are liable to Plaintiff, they ask for “common law indemnification, and/or contribution from” NBA due to NBA's alleged “tortious conduct in providing its professional architectural services” and for NBA's alleged breach of contract. (Id. at 4-5). In this vein, Overall Creek and Chandler Properties demand judgment (1) granting them “indemnification and/or contribution against” NBA and (2) a finding that NBA is liable for breach of contract. (Id. at 8). In addition, they demand “costs and disbursements of this action and all other and further relief that this court deems just and proper.” (Id.).

Pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, NBA moves for dismissal of Overall Creek and Chandler Properties' Third-Party Complaint because “it avers only state law causes of action . . . for equitable indemnity, equitable contribution and breach of contract,” which, NBA claims, “are all preempted under the FHA.”^[3] (Doc. No. 52-1, at 2). Overall Creek and Chandler Properties have filed a Response (Doc. No. 55), and NBA has filed a Reply (Doc. No. 57).

II. STANDARD OF REVIEW

Rule 12(b)(6) of the Federal Rules of Civil Procedure allows a defendant to test the legal sufficiency of a complaint. Reeves v. PharmaJet, Inc., 846 F.Supp.2d 791, 795 (N.D. Ohio 2012); Fed.R.Civ.P. 12(b)(6) (allowing for dismissal of a complaint “for failure to state a claim upon which relief can be granted”). When faced with a Rule 12(b)(6) motion, a court must determine whether the complaint contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 547 (2007). A claim is plausible on its face “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). “Determining whether a complaint states a plausible claim for relief will . . . be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679 (citation omitted). In addition, a court “must construe the complaint in a light most favorable to plaintiffs, accept all well-pled factual allegations as true, and determine whether plaintiffs undoubtedly can prove no set of facts in support of those allegations that would entitle them to relief.” Bishop v. Lucent Techs., Inc., 520 F.3d 516, 519 (6th Cir. 2009) (citing Harbin-Bey v. Rutter, 420 F.3d 571, 575 (6th Cir. 2005)). “[A] complaint will not be dismissed pursuant to Rule 12(b)(6) unless no law supports the claim . . . or an insurmountable bar appears on the face of the complaint.” Clevenger v. Dillards, Inc., 412 F.Supp.2d 832, 840 (S.D. Ohio 2006).

To survive a motion to dismiss under Rule 12(b)(6), a complaint “must contain either direct or inferential allegations respecting all the material elements to sustain a recovery under some viable legal theory.” Mezibov v. Allen, 411 F.3d 712, 716 (6th Cir. 2005) (citation omitted). The plaintiff's factual allegations “must ‘raise a right to relief above the speculative level.'” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008) (quoting Twombly, 550 U.S. at 555). “Conclusory allegations or legal conclusions masquerading as factual allegations” cannot survive a Rule 12(b)(6) motion to dismiss. Bishop, 520 F.3d at 519 (citation omitted).

III. DISCUSSION

Overall Creek and Chandler Properties raise the following claims against NBA: (1) equitable indemnification and equitable contribution and (2) breach of contract. (Doc. No. 43, at 4-8). According to NBA, the court must dismiss Overall Creek and Chandler Properties' Third-Party Complaint because it raises “only state law causes of action” that are preempted under the FHA. (Doc. No. 52-1, at 2). In response, Overall Creek and Chandler Properties, by all appearances, do not dispute that they are asserting “only” state law claims or that they are “derivative claims in the sense that they arise solely based on [Overall Creek and Chandler Properties]'s actual or potential first-party liability [to Plaintiff] under” the FHA. Equal Rights Ctr. v. Archstone Smith Trust, 603 F.Supp.2d 814, 821 (D. Md. 2009). They counter, rather, that their state-law claims are not preempted under the FHA. (Doc. No. 55, at 3).

The court is unaware of a Sixth Circuit decision, and the parties do not cite one, that squarely addresses whether the FHA preempts state-law claims for indemnification, contribution, or breach of contract. See Miami Valley Fair Hous. Ctr., Inc. v. Campus Vill. Wright State, LLC, No. 3:10cv00230, 2012 WL 4473236, at *5 (S.D. Ohio Sept. 26, 2012) (“The Sixth Circuit declined to address whether the FHA permits or preempts state-law claims in contribution or indemnification.”); see also Murphy, 2009 WL 3614829 at *1 (“The Sixth Circuit has not yet issued an opinion on whether the FHA or the ADA provide[s] an express or implied right to indemnity or contribution.”). The parties, therefore, devote a significant portion of their briefs to arguing which nonbinding case applies here, with NBA relying heavily on this court's decision in Murphy. The court, as a threshold matter, will consider Murphy's application to this case.^[4]

A. Murphy's Application

In Murphy, the plaintiff, United States of America sued owners and developers of several multifamily apartment complexes. 2009 WL 3614829 at *1. Like Plaintiff herein, the plaintiff in Murphy claimed that the defendants violated the ADA and FHA, Title VIII of the Civil Rights Act of 1968, as amended by the Fair Housing Amendments Act of 1988. Id.; (Doc. No. 1, at 1). The defendants/third-party plaintiffs in Murphy filed two third-party complaints against third-party defendants who were architects, engineers, and contractors allegedly involved in the design and construction of the apartment complexes. 2009 WL 3614829 at *1. The third-party plaintiffs asserted claims for express indemnity, implied indemnity, breach of contract, negligence, and violations of the FHA. Id. (emphasis added). Like NBA, the third-party defendants, under Rule 12(b)(6), moved for dismissal of the third-party plaintiffs' derivative state-law claims on the basis that “no express or implied right to indemnity or contribution” exists under the FHA. Id. at *1-2. This court agreed because it determined that the third-party plaintiffs' “state-law claims for express or implied indemnity and/or contribution” (1) were “de facto claims for indemnity and contribution that are preempted by federal law” and (2) “would frustrate the achievement of Congress' purposes in adopting the FHA and ADA.” Id. (citing Equal Rights Ctr., 603 F.Supp.2d at 824). The court, therefore, dismissed...