Zambali v. Shulman Rogers, P.A.

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BENJAMIN ZAMBALI, on his own behalf and on behalf of all others similarly situated, Plaintiffs, v. SHULMAN ROGERS, P.A., et al., Defendants.

Civil No. SAG-23-03194

United States District Court, D. Maryland

June 25, 2024

MEMORANDUM OPINION

Stephanie A. Gallagher United States District Judge

Benjamin Zambali (“Zambali”) filed this putative class action against three defendants, Shulman Rogers, P.A (“Shulman Rogers”), Columbia 531, LLC (“Columbia 531”), and Greystar Management Services, L.P. (“Greystar”) (collectively “Defendants”), relating to efforts to collect unpaid rent accrued during a period when Zambali alleges his landlord was not properly licensed. ECF 1. The Complaint relies upon this Court's federal question jurisdiction pursuant to 28 U.S.C. § 1331, because Zambali asserts a claim under the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692-1692p, against Shulman Rogers in addition to multiple state law claims against all of the Defendants. Each Defendant has filed a motion to dismiss the Complaint. ECF 18, 25, 26. This Court has reviewed the filings, including the oppositions and reply, ECF 2730, and finds that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2023). For the reasons explained below, Shulman Rogers's Motion to Dismiss Plaintiff's Class Action Complaint, ECF 25, will be GRANTED as to the FDCPA claim, which will be dismissed without prejudice. This Court declines to exercise pendent jurisdiction over the remaining state law claims, which can be reasserted against the Defendants in state court.

I. FACTUAL BACKGROUND

The following facts are derived from Zambali's Complaint, ECF 1, and are assumed to be true for purposes of adjudicating this motion to dismiss. In Howard County, Maryland, the Howard County Property Maintenance Code for Rental Housing requires all rental housing to be licensed. ECF 1 ¶ 12. Each rental property is assigned a license number. See id. A rental property's license status can be verified on Howard County's website. Id.

Columbia 531 owns 10X Living at Columbia Town Center (“the Property”), which is a 531-unit apartment complex in Howard County. Id. ¶ 11. Greystar serves as the property manager for the Property. Id. On or about August 1, 2021, the Property's license lapsed and showed as “Delinquent” on Howard County's website. Id. ¶ 13; ECF 28-1.^[1]On January 19, 2023, the Property's license status changed to “Ready for Issuance” and then changed to “Issued” on June 15, 2023. ECF 28-1. During what Zambali calls “the unlicensed period” between 2021 and 2023, Greystar and Columbia 531 continued to collect rent through a resident portal website. ECF 1 ¶ 16.

Zambali rented 10420 Swift Stream Place #308, a unit in the Property, during the unlicensed period. Id. ¶ 15. Occasionally, Zambali did not timely pay his rent. Id. ¶ 18. When Zambali failed to make timely payments, all three Defendants engaged in collection efforts. Id. at ¶¶ 18-24. On no fewer than three occasions, as part of their collection efforts, Columbia 531 and Greystar provided Zambali with “Notices of Intent to File a Complaint for Summary Ejectment.” Id. ¶ 19. These collection efforts occurred during the unlicensed period. Id.

Shulman Rogers is a law firm that represents Columbia 531 and Greystar. Id. ¶ 21. As part of its collection efforts, Shulman Rogers, on behalf of Columbia 531 and Greystar, filed two failure-to-pay rent actions against Zambali. Id. ¶¶ 19, 24. The first failure-to-pay rent action (“Case 5942”) was filed on June 12, 2023. ECF 25 at 2 & n.1 (citing Maryland's Judiciary Case Search website). When Zambali appeared in court for Case 5942, Shulman Rogers voluntarily dismissed the case. ECF 1 ¶ 23. Shulman Rogers filed the second failure-to-pay-rent action (“Case 6658”) on July 3, 2023. ECF 25 at 3 & n.2 (citing Maryland's Judiciary Case Search website). Again, when Zambali appeared in court for Case 6658, Shulman Rogers voluntarily dismissed the case. ECF 1 ¶ 25. Both cases sought to collect unpaid rent accrued during the unlicensed period. Id. ¶¶ 21, 24. The complaint Shulman Rogers filed in Case 5942 contained the Property's expired license number. Id. ¶ 22.

II. LEGAL STANDARDS

A. Federal Rule of Civil Procedure 12(b)(1)

Rule 12(b)(1) of the Federal Rules of Civil Procedure authorizes dismissal for lack of subject matter jurisdiction, including claims for which a plaintiff lacks standing. See Barnett v. United States, 193 F.Supp.3d 515, 518 (D. Md. 2016). A challenge to subject matter jurisdiction may proceed either as a facial challenge, asserting that the allegations pleaded in the complaint are insufficient to establish subject matter jurisdiction, or a factual challenge, asserting that the jurisdictional allegations of the complaint are not true. Mayor & City Council of Balt. v. Trump, 416 F.Supp.3d 452, 479 (D. Md. 2019) (internal quotation marks omitted) (quoting Kerns v. United States, 585 F.3d 187, 192 (4th Cir. 2009)). The plaintiff bears the burden of proving, by a preponderance of the evidence, the existence of subject matter jurisdiction. Id.^[2]

B. Federal Rule of Civil Procedure 12(b)(6)

A defendant is permitted to test the legal sufficiency of a complaint by way of a motion to dismiss. See, e.g., In re Birmingham, 846 F.3d 88, 92 (4th Cir. 2017); Goines v. Valley Cmty. Servs. Bd., 822 F.3d 159, 165-66 (4th Cir. 2016). A Rule 12(b)(6) motion constitutes an assertion by a defendant that, even if the facts alleged by a plaintiff are true, the complaint fails as a matter of law “to state a claim upon which relief can be granted.”

Whether a complaint states a claim for relief is assessed by reference to the pleading requirements of Rule 8(a)(2), which provides that a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” The purpose of the rule is to provide the defendants with “fair notice” of the claims and the “grounds” for entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-56 (2007).

To survive a motion under Fed.R.Civ.P. 12(b)(6), a complaint must contain facts sufficient to “state a claim to relief that is plausible on its face.” Id. at 570; see Ashcroft v. Iqbal, 556 U.S. 662, 684 (2009) (“Our decision in Twombly expounded the pleading standard for ‘all civil actions' ....” (citation omitted)); see also Willner v. Dimon, 849 F.3d 93, 112 (4th Cir. 2017). However, a plaintiff need not include “detailed factual allegations” in order to satisfy Rule 8(a)(2). Twombly, 550 U.S. at 555. Further, federal pleading rules “do not countenance dismissal of a complaint for imperfect statement of the legal theory supporting the claim asserted.” Johnson v. City of Shelby, 574 U.S. 10, 11 (2014) (per curiam).

Nevertheless, the rule demands more than bald accusations or mere speculation. Twombly, 550 U.S. at 555; see Painter's Mill Grille, LLC v. Brown, 716 F.3d 342, 350 (4th Cir. 2013). If a complaint provides no more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action,” it is insufficient. Twombly, 550 U.S. at 555. Rather, to satisfy the minimal requirements of Rule 8(a)(2), the complaint must set forth “enough factual matter (taken as true) to suggest” a cognizable cause of action, “even if . . . [the] actual proof of those facts is improbable and . . . recovery is very remote and unlikely.” Id. at 556 (internal quotation marks and citation omitted).

In reviewing a Rule 12(b)(6) motion, a court “must accept as true all of the factual allegations contained in the complaint” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations omitted); Houck v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir. 2015). However, a court is not required to accept legal conclusions drawn from the facts. See Papasan v. Allain, 478 U.S. 265, 286 (1986). “A court decides whether [the pleading] standard is met by separating the legal conclusions from the factual allegations, assuming the truth of only the factual allegations, and then determining whether those allegations allow the court to reasonably infer” that the plaintiff is entitled to the legal remedy sought. A Soc'y Without a Name v. Virginia, 655 F.3d 342, 346 (4th Cir. 2011), cert. denied, 566 U.S. 937 (2012).

III. FDCPA CLAIM

Maryland law prohibits a landlord from filing an action against a tenant for unpaid rent that accrued during a period when the landlord's property was not licensed. See Assanah-Carroll v Law Offs. of Edward J. Maher, P.C., 281 A.3d 72, 76 (Md. 2022). Zambali tries to extend that prohibition to argue that Shulman Rogers violated two provisions of the FDCPA by attempting to collect the delinquent rent: 15 U.S.C. § 1692f and 15 U.S.C. § 1692e. ECF 1 ¶¶ 38-46. According to the Complaint, Shulman Rogers violated these provisions by using “unfair or unconscionable means to collect or attempt to collect any debt.” Id. ¶ 41. Shulman Rogers allegedly did this by “attempt[ing] to collect unpaid rent incurred during the time that a rental property lacked a necessary license.” Id. ¶ 45. Additionally, the Complaint alleges that Shulman Rogers “made false representations of the character, amount, or legal status of any debt” by “attempting to collect rental obligations incurred while a property was unlicensed.” Id. ¶ 46. Zambali asserts that he and others similarly situated seek damages “in an amount equal to all amounts paid by [Zambali] or members of Class I after [Shulman Rogers] filed a failure-to-pay rent action or otherwise engaged in collection activity towards them with respect to rent attributable [to] the period that the relevant property was...