Wallace v. Greystar Real Estate Partners, LLC

KATRINA WALLACE, Plaintiff, v. GREYSTAR REAL ESTATE PARTNERS, LLC; GREYSTAR GP II, LLC;GREYSTAR MANAGEMENT SERVICES, L.P.; GREYSTAR RS NATIONAL, INC.;GREYSTAR RS SE LLC; GREP SOUTHEAST, LLC; and INNESBROOK APARTMENTS, LLCd/b/a SOUTHPOINT GLEN, Defendants.

1:18CV501

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

September 11, 2019

MEMORANDUM OPINION AND ORDER

LORETTA C. BIGGS, District Judge.

Plaintiff initiated this putative class action alleging violations of the North Carolina Residential Rental Agreements Act, N.C. Gen. Stat. § 42-38 et seq., the North Carolina Debt Collection Act ("NCDCA"), N.C. Gen. Stat. § 75-50 et seq., and the North Carolina Unfair and Deceptive Trade Practices Act ("NCUDTPA"), N.C. Gen. Stat. § 75-1 et seq.¹ (ECF No. 32.) Before the Court are three motions to dismiss: (a) Innesbrook Apartments, LLC's ("Innesbrook") motion to dismiss, (ECF No. 38); (b) GREP Southeast, LLC's ("GREP") motion to dismiss, (ECF No. 49); and, (c) filing together, Greystar Real Estate Partners, LLC ("Greystar Real Estate"), Greystar Management Services, L.P. ("Greystar Management"),Greystar RS National, Inc. ("Greystar National"), and Greystar RS SE, LLC's ("Greystar SE") (collectively, "Greystar Defendants"), motion to dismiss, (ECF No. 40).² Plaintiff has also filed a Motion for Jurisdictional Discovery. (ECF No. 57.) For the reasons stated below, the Court denies Innesbrook's and GREP's motions to dismiss; denies in part the Greystar Defendants' motion to dismiss; and grants Plaintiff's Motion for Jurisdictional Discovery.

I. BACKGROUND

Plaintiff leased an apartment at Southpoint Glen Apartments, the trade name for Innesbrook, for a period from April 23, 2017 through June 21, 2018. (ECF No. 32 ¶¶ 18, 55.)³ Plaintiff had to undergo unexpected brain surgery in November 2017, after which she was unable to return to work. (See id. ¶¶ 59-61.) By February 2018, Plaintiff had exhausted her savings and was unable to pay her February rental payment. (Id. ¶ 63.) On February 6, Plaintiff was charged $43.55 as a late fee. (Id. ¶ 64.) On February 13, Plaintiff received an email from a Southpoint Glen Assistant Community Manager instructing her that "all unpaid accounts have now been filed on for possession" and that an additional $201 "filing fee" charge would be required "[t]o dismiss the eviction filing." (ECF No. 32-8.) On February 16, a charge of $201.00, titled "Legal Fees" (the "Eviction Fees"), was placed on Plaintiff's account ledger. (ECF No. 32-5 at 3.) On February 21, a Complaint in Summary Ejectment was filed in Durham County District Court, seeking possession of the premises only and "omit[ting]any claim for rents or damages." (ECF No. 32-10 at 2.) That same day, before Defendants had obtained service on Plaintiffs for the summary ejectment action, Plaintiff paid the full balance on her account ledger. (ECF No. 32-5 at 3; ECF No. 32-10 at 5 (serving Plaintiff on February 22).) Defendants dismissed the ejectment action without prejudice a few days later. (ECF No. 32-10 at 1.)

Plaintiff filed this action in Durham County Superior Court, and Defendants removed this action to this Court on June 13, 2018 pursuant to 28 U.S.C. §§ 1332, 1441, 1446. (ECF Nos. 1, 9.) Defendants Innesbrook and GREP filed nearly identical motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). (ECF Nos. 38, 49.) Greystar Defendants filed a motion to dismiss pursuant to Rules 12(b)(2) and 12(b)(6), arguing that this Court does not have personal jurisdiction over them and that Plaintiff has failed to state a claim. (ECF No. 40.) Because personal jurisdiction is a threshold issue which must be decided before turning to the merits of the case, Sucampo Pharm, Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 548 (4th Cir. 2006), the Court will first address Greystar Defendants' arguments pursuant to Rule 12(b)(2).

II. RULE 12(b)(2)—PERSONAL JURISDICTION

A. Standard of Review

On a personal jurisdiction challenge, the plaintiff bears the burden of ultimately proving personal jurisdiction by a preponderance of the evidence. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). When, however, as here, the court decides a pretrial personal jurisdiction motion without conducting an evidentiary hearing—relying instead on the motion papers, supporting legal memoranda, and allegationsin the complaint⁴—the plaintiff need only make a prima facie showing of personal jurisdiction. See Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009); Carefirst of Md., 334 F.3d at 396. "[A] plaintiff makes a prima facie showing of personal jurisdiction by presenting facts that, if true, would support jurisdiction over the defendant." See Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 561 (4th Cir. 2014) (citing Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857, 862 (9th Cir. 2003)). However, a threshold prima facie finding of jurisdiction does not settle the issue, as the plaintiff "must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing." New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 n.5 (4th Cir. 2005) (citation omitted).

When considering whether the plaintiff has made a prima facie showing of jurisdiction, the court "must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction." Universal Leather, 773 F.3d at 558 (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)); see also Sneha Media & Entm't, LLC v. Associated Broad. Co. P Ltd., 911 F.3d 192, 196 (4th Cir. 2018) ("[W]hen the parties have not yet had a fair opportunity to develop and present the relevant jurisdictional evidence, we have treated the disposition of Rule 12(b)(2) motions to dismiss for a lack of personal jurisdiction in conceptually the same manner as we treat the disposition of motions to dismiss under Rule 12(b)(6)."). "Once a defendant presents evidence indicating that the requisite minimum contacts do not exist, the plaintiff must comeforward with affidavits or other evidence in support of its position." Pathfinder Software, 127 F. Supp. 3d at 538 (quoting Vision Motor Cars, Inc. v. Valor Motor Co., 981 F. Supp. 2d 464, 468 (M.D.N.C. 2013)). When both sides present evidence, factual conflicts must be resolved in favor of the party asserting jurisdiction for the limited purpose of determining whether a prima facie showing has been made. Id.

B. Discussion

Greystar Defendants argue that this Court lacks personal jurisdiction over them. (ECF No. 41 at 7.) Greystar Defendants introduced evidence, in the form of a declaration, that Innesbrook owns Southpoint Glen Apartments and GREP manages Southpoint Glen Apartments. (ECF No. 41-1 ¶ 7.) Greystar Defendants argue, then, that none of them have "ever performed property management services at Innesbrook." (Id. ¶ 6.) Plaintiff argues in response that this Court has specific personal jurisdiction over Greystar Defendants, or, in the alternative, has jurisdiction under a partnership or alter ego theory. (ECF No. 56 at 10-21.) Plaintiff also moves for jurisdictional discovery, "should the Court determine that there is not sufficient evidence in the record" to exercise personal jurisdiction over each Greystar Defendant. (ECF No. 58 at 1-2.)

A federal district court can exercise personal jurisdiction over a nonresident defendant only if "(1) such jurisdiction is authorized by the long-arm statute of the state in which the district court sits; and (2) application of the relevant long-arm statute is consistent with the Due Process Clause of the Fourteenth Amendment." Universal Leather, 773 F.3d at 558. North Carolina's long-arm statute "permits the exercise of personal jurisdiction over a defendant to the outer limits allowable under federal due process." Id. (citing N.C. Gen. Stat. § 1-75.4(1)(d); Dillon v. Numismatic Funding Corp., 231 S.E.2d 629, 630 (N.C. 1977)). The two-prong test therefore "merges into [a] single question" when North Carolina is the forum state, allowing the court to proceed directly to the constitutional analysis. See Universal Leather, 773 F.3d at 558-59; see also ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 391 (4th Cir. 2012).

Under the Due Process Clause of the Fourteenth Amendment, two paths permit a court to exercise personal jurisdiction over a nonresident defendant: general or specific personal jurisdiction. Universal Leather, 773 F.3d at 559. "General personal jurisdiction requires 'continuous and systemic' contacts with the forum state." Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 188 (4th Cir. 2016) (quoting Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 414-16 (1984)). Plaintiff does not attempt to argue that Greystar Defendants had such contacts with North Carolina and does not assert that this Court has general personal jurisdiction over Greystar Defendants.⁵ (ECF No. 56 at 10.) Instead, Plaintiff claims that this Court has specific personal jurisdiction over Greystar Defendants arising from Greystar Defendants' actions in North Carolina. (ECF No. 56 at 10.)

For specific personal jurisdiction, the defendant must have "purposefully established minimum contacts in the forum State" such "that [it] should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (internal quotation marks and citations omitted). Courts use a three-prong test to evaluate specific personal jurisdiction: "(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs' claims arise out of thoseactivities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable." Perdue...