# HARGROVE v. PLEASANTVILLE HOUSING AUTHORITY

> District Court, D. New Jersey · June 3, 2020

URL: https://www.frixlaw.com/law-library/cases/10268317

## Case

- **Court:** District Court, D. New Jersey
- **Decided:** June 3, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE
__________________________________
:
CHARLES HARGROVE and CARLA :
HARGROVE, :
:
Plaintiffs, : Civil No. 19-1162 (RBK/KMW)
:
v. : OPINION
:
PLEASANTVILLE HOUSING :
AUTHORITY and VERNON :
LAWRENCE, Executive Director, :
:
Defendants. :
__________________________________

KUGLER, United States District Judge:
This matter comes before the Court on the Motion for Leave to File a Second Amended
Complaint (Doc. No. 19) filed by Plaintiffs Charles Hargrove and Carla Hargrove. For the reasons
set forth below, Plaintiffs’ Motion is GRANTED.
I. BACKGROUND
The Court has already discussed the factual background of this case in its December 10,
2019 Opinion dismissing Plaintiffs’ First Amended Complaint. See Hargrove v. Pleasantville
Housing Auth., No. 19-1162, 2019 WL 6712308, at *1–2 (D.N.J. Dec. 10, 2019). Nevertheless,
for the sake of clarity, it is necessary to once again review the history of Plaintiffs’ claims, as well
as to discuss Plaintiffs’ new allegations as to what has transpired in the aftermath of the Court’s
December 10 ruling.
Plaintiff Charles Hargrove served as the Executive Director of the Pleasantville Housing
Authority (“PVHA”) from 2004 to 2009. (Doc. No. 19-3 (“SAC”) at ¶ 7). On February 22, 2006,
the PVHA’s Board of Commissioners adopted Resolution No. 2006-3, which authorized the
PVHA to pay for New Jersey State Health Benefits Program (“SHBP”) coverage as a post-
retirement benefit for certain employees. (Id. at ¶ 8). Subsequently, on July 22, 2009, the Board of
Commissioners adopted Resolution 2009-12, which authorized SHBP coverage and Medicare Part
B reimbursement as a post-retirement benefit for Charles Hargrove and his spouse, Plaintiff Carla

Hargrove. (Id. at ¶¶ 9, 11).
On April 24, 2017, Charles received a letter from Defendant Lawrence, the current
Executive Director of the PVHA, informing him that the PVHA was exiting the SHBP. (Id. at ¶
12). Lawrence advised Charles to contact Kevin Clifton, a Senior Benefits Consultant at
NaitonalHR, as soon as possible. (Id. at ¶ 12). Charles spoke to Clifton, as well as Albertine Palmer
of PVHA Human Resources, who both assured him that the Hargroves would be able to remain in
the SHBP. (Id. at ¶ 13). However, Charles received a November 1, 2017 letter from the SHBP
terminating his coverage effective December 1, 2017 because his coverage was contingent on the
PVHA remaining in the SHBP. (Id.) Charles informed Lawrence of these developments via a

November 8, 2017 letter. (Id.)
On November 28, 2017, Lawrence sent Charles a letter, explaining that the PVHA was
“surprised to find out that [PVHA]’s retiree’s health benefits will not be covered under the [SHBP]
as previously informed” but that the PVHA was taking steps to ensure that the Hargroves did not
experience a lapse in coverage. (Id. at ¶ 15; Doc. No. 19-5 at 30). The Hargroves met with Alan
Farber, a health insurance broker sent by the PVHA, who only provided “Medi-gap” coverage.
(SAC at ¶ 16). As such, Plaintiffs obtained private health insurance coverage at their own expense.
(Id.) Plaintiffs then retained counsel and put the PVHA on notice of their intent to hold the PVHA
responsible for all the costs of their new coverage. (Id. at ¶¶ 17–18).
On January 8, 2018, the PVHA’s counsel sent Plaintiffs’ counsel a letter stating that the
PVHA intended to reimburse the Hargroves. (Id. at ¶ 19). After discussions between counsel, on
January 19, 2018, Plaintiffs’ counsel sent Defendants’ counsel a letter requesting Defendants to
place their liability insurance carriers and the United States Department of Housing and Urban
Development (“HUD”) on notice of Plaintiffs’ claims. (Id. at ¶ 20). After prodding by Plaintiffs’

counsel, on May 4, 2018, Defendants responded by restating the PVHA’s intent to reimburse the
Hargroves’ health insurance premium costs and requesting copies of those premiums for
reimbursement. (Id. at ¶ 22). On June 8, 2018, Plaintiffs’ counsel responded to Defendants’ request
for documentation with a demand for $504,348.06 in compensatory damages, representing an
estimate of the costs of continued healthcare coverage for the rest of Plaintiffs’ lives. (Id. at ¶ 23).
On June 20, 2018, the PVHA sent a letter directly to Charles requesting copies of Medicare
Part B invoices for reimbursement. (Id. at ¶ 25). And on July 2, 2018, Defendants’ counsel sent
Plaintiffs’ counsel another letter requesting copies of premiums paid by the Hargroves for
reimbursement. (Id. at ¶ 26). On July 13, 2018, Plaintiffs’ counsel responded with a letter asserting

that the PVHA would need approval from HUD in order to reimburse the Hargroves for their
premium payments and demanding that the PVHA obtain a legal opinion or representation that no
such authorization was necessary from an authorized HUD representative. (Id. at ¶ 27). Plaintiffs
requested such an opinion directly from HUD on July 26, 2018. (Id. at ¶ 27).
Plaintiffs commenced this action on January 28, 2019 by filing a Complaint (Doc. No. 1),
filing an Amended Complaint (Doc. No. 3) the next day. Plaintiffs claimed that Defendants’
actions violated their Fourteenth Amendment Due Process rights, the Age Discrimination in
Employment Act of 1967, 29 U.S.C. § 621 et seq., the New Jersey Law Against Discrimination,
N.J.S.A. 10:5–12, and state common law. On May 30, 2019, Defendants filed a Motion to Dismiss
under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).
On December 10, 2019, the Court granted Defendants’ Motion to Dismiss. Hargrove, 2019
WL 6712308, at *6. Although Defendants did not clearly raise the issue of constitutional standing
in their Motion, the Court raised it sua sponte. Id. at *3. Noting that Defendants consistently

affirmed their intention to reimburse Plaintiffs for their health insurance premiums, the Court
determined that the crux of the parties’ dispute was whether the PVHA could use HUD funds to
reimburse Plaintiffs for their health insurance premiums. Id. at *3–4. However, the Court found
that Plaintiffs had not sufficiently alleged that any potential violation of these regulations could
result in harm to them. Id. at *4–6. As such, the Court concluded that Plaintiffs had failed to satisfy
the “injury-in-fact” requirement of standing, explaining that:
By filing this lawsuit, Plaintiffs attempt to usurp HUD’s prerogative by forcing
Defendants to comply with Plaintiffs’ speculation as to what HUD’s regulations
require. Plaintiffs are not categorically barred from pursuing this course of action,
but they need to demonstrate that injury will befall them if the Court does not allow
it. Alternatively, they must demonstrate that Defendants have injured them
regardless of whether the proposed reimbursements are lawful. Because the
Amended Complaint does neither, all of Plaintiffs’ claims must be dismissed.

Id. at *6. The Court gave Plaintiffs until December 24, 2019 to file a motion to amend their
complaint. Id.
On December 18, 2019, Plaintiffs’ counsel sent Defendant’s counsel an email asking if the
PVHA was prepared to reimburse Plaintiffs for their health insurance premiums on or before
December 24. (SAC at ¶ 33; Doc. No. 19-7 at 2). Plaintiffs’ also requested that the Court extend
the deadline to file a motion for leave to amend to February 7, 2020; the Court granted this request.
(Doc. Nos. 16, 17). On December 20, 2019, Plaintiffs’ counsel sent Defendant’s counsel a letter
detailing Plaintiffs’ health insurance expenditures during 2018 and 2019 and requesting
$17,779.33 in reimbursement. (SAC at ¶¶ 35–38; Doc. No. 19-7 at 8–9). Plaintiffs’ counsel
requested a response on or before December 23, 2019. (Doc. No. 19-7 at 9). Plaintiffs sent
additional documentation to Defendants’ counsel on December 23, 2019. (SAC at ¶ 38; Doc. No.
19-7 at 11–12).
Defendants did not respond to these communications until January 15, 2020, when

Defendants’ counsel advised Plaintiffs’ counsel that the PVHA Board of Commissioners would
be meeting on January 22, 2020. (SAC at ¶ 39). On January 27, 2020, Defendant’s counsel sent an
email to Plaintiffs’ counsel indicating that the Board of Commissioners had decided against
reimbursing Plaintiffs at the present time. (SAC at ¶ 42; Doc. No. 19-7 at 23–24). Instead, the
Board had decided to file a motion for sanctions against Plaintiffs, seeking to offset the
reimbursement payments owed to Plaintiffs by the amount the board had spent on its legal defense
during this litigation. (SAC at ¶ 43; Doc. No. 19-7 at 23–24).
On February 3, 2020, Defendants filed their promised Motion for Sanctions. (Doc. No. 18).
Plaintiffs’ filed the present Motion to Amend on February 7, 2020. On March 30, 2020, the Court

denied Defendants’ Motion for Sanctions for failing to comply with the procedural requirements
of Federal Rule of Civil Procedure 11. (Doc. No. 24). The Court now turns its attention to
Plaintiffs’ Motion to Amend.
II. LEGAL STANDARD
Amendments to pleadings are governed by Federal Rule of Civil Procedure 15(a), which
states that leave to amend “shall be freely given as justice so requires.” The Third Circuit has
shown a strong liberality in allowing amendments under Rule 15 in order to ensure that claims will
be decided on the merits rather than on technicalities. Dole v. Arco Chem. Co., 921 F.2d 484, 487
(3d Cir. 1990). Leave to amend under Rule 15 should be denied only in certain circumstances,
such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure
deficiencies by amendments previously allowed, undue prejudice, or clear futility of the
amendment. Foman v. Davis, 371 U.S. 178, 182 (1962); Fed. Deposit Ins. Corp. v. Bathgate, 27
F.3d 850, 874 (3d Cir. 1994). “‘Futility’ means that the complaint, as amended, would fail to state
a claim upon which relief could be granted.” Shane v. Fauver, 213 F.3d 113, 115 (3d Cir. 2000)

(citation omitted). A claim is “futile” if it would not survive a motion to dismiss pursuant to Federal
Rules of Civil Procedure 12(b)(1) or 12(b)(6). Id.; United States v. Sensient Colors, Inc., No. 07-
1275, 2009 WL 394317, at *3 (D.N.J. Feb. 13, 2009), aff’d, 649 F. Supp. 2d 309 (D.N.J. 2009).
Where a defendant moves to dismiss under Rule 12(b)(1) for lack of subject matter
jurisdiction, the plaintiff generally bears the burden of proving by a preponderance of the
evidence that the Court has subject matter jurisdiction. See Gould Elecs. Inc. v. United States,
220 F.3d 169, 178 (3d Cir. 2000). A district court may treat a party's motion to dismiss for lack
of subject-matter jurisdiction under Rule 12(b)(1) as either a facial or factual challenge to the
court's jurisdiction. Id. at 176. “In reviewing a facial attack, the court must only consider the

allegations of the complaint and documents referenced therein and attached thereto, in the light
most favorable to the plaintiff.” Id. (citing PBGC v. White, 998 F.2d 1192, 1196 (3d Cir. 1993)).
By contrast, “[i]n reviewing a factual attack, the court may consider evidence outside the
pleadings.” Id. (citing Gotha v. United States, 115 F.3d 176, 178–79 (3d Cir. 1997)); see United
States ex rel. Atkinson v. Pa. Shipbuilding Co., 473 F.3d 506, 514 (3d Cir. 2007). A district court
has “substantial authority” to “weigh the evidence and satisfy itself as to the existence of its
power to hear the case.” Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.
1977). “[N]o presumptive truthfulness attaches to plaintiff's allegations, and the existence of
disputed material facts will not preclude the trial court from evaluating for itself the merits of
jurisdictional claims.” Id.
Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss an action for failure to
state a claim upon which relief can be granted. When evaluating a motion to dismiss, “courts accept
all factual allegations as true, construe the complaint in the light most favorable to the plaintiff,

and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled
to relief.” Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009) (quoting Phillips v. Cty.
of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008)). In other words, a complaint survives a motion to
dismiss if it contains enough factual matter, accepted as true, to “state a claim to relief that is
plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
To make this determination, courts conduct a three-part analysis. Santiago v. Warminster
Twp., 629 F.3d 121, 130 (3d Cir. 2010). First, the Court must “tak[e] note of the elements a plaintiff
must plead to state a claim.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009)). Second,
the Court should identify allegations that, “because they are no more than conclusions, are not

entitled to the assumption of truth.” Id. (quoting Iqbal, 556 U.S. at 680). “Threadbare recitals of
the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. (quoting Iqbal, 556 U.S. at 678). Finally, “when there are well-pleaded factual
allegations, a court should assume their veracity and then determine whether they plausibly give
rise to an entitlement for relief.” Id. (quoting Iqbal, 556 U.S. at 679). A complaint cannot survive
a motion to dismiss where a court can only infer that a claim is merely possible rather than
plausible. Id.
III. DISCUSSION
Defendants contend that Plaintiffs’ efforts to amend are futile, as the allegations contained
in the Second Amended Complaint are insufficient to confer standing.1 (Doc. No. 21 (“Def. Brief”)
at 10). In order to have constitutional standing, “[t]he plaintiff must have (1) suffered an injury in
fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to
be redressed by a favorable judicial decision.” Spokeo v. Robins, 136 S. Ct. 1530, 1547 (2016). To

avoid dismissal, the complaint must “clearly allege facts demonstrating each element.” Id. (internal
quotation omitted).
The first element, “injury in fact” requires the plaintiff to show “an invasion of a legally
protected interest which is (a) concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal
citations and quotations omitted). To be concrete, the injury must be “‘real,” and not “abstract.”
Spokeo, 136 S. Ct. at 1548. Consequently, “a bare procedural violation” of a statute or regulation
is insufficient to satisfy the injury-in-fact requirement. Id. at 1549.
As discussed above, the Court previously concluded that Plaintiffs’ first Amended

Complaint did not satisfy the injury-in-fact requirement. At that time, Plaintiffs were principally
concerned with whether the PVHA’s reimbursement proposal was permissible under HUD
regulations, an issue the Court found to be non-justiciable. But as alleged in the Second Amended
Complaint, the situation between the parties has completely changed since the Court issued its
December 10, 2019 Opinion. Plaintiffs are no longer refusing to submit to Defendants’
reimbursement plan due to fear of a possible HUD enforcement action; rather, Defendants are
refusing to reimburse Plaintiffs, apparently in an effort to extract compensation for their legal fees.
(See Def. Brief at 16 (“Following the accumulation of thousands of dollars of attorneys’ fees and

1 Defendants do not make any argument that Plaintiffs’ claims would fail to survive a Rule 12(b)(6) motion to dismiss.
As such, the Court does not address the merits of any of Plaintiffs’ claims.
expenses incurred to defend themselves in this lawsuit, the PVHA Defendants respectfully request
an offset of their legal expenses prior to reimbursing Plaintiffs for any qualified medical
expenses.”)).
Defendants’ failure to reimburse Plaintiffs is a constitutionally cognizable injury-in-fact.
Defendants acknowledge that Plaintiffs are owed reimbursement for their health insurance

expenses, (id.); Defendants affirm that they have received documentation of Plaintiffs’ health
insurance expenses for 2018 and 2019 and accept that the overwhelming majority of these
expenses qualify for reimbursement, (id. at 12–14 (indicating that the PVHA believes Plaintiffs
are owed $17,576.83 in reimbursement for expenses incurred in 2018 and 2019)); and Defendants
attest that it was their own decision, not HUD’s, to decline to reimburse Plaintiffs, (id.).
Consequently, the core issue of this case is the legality of the PVHA’s refusal to honor its
obligation to Plaintiffs. Such an issue is plainly justiciable.
Defendants complain that it is unfair to expect them to quickly reimburse Plaintiffs after
Plaintiffs held up the reimbursement process for years. (Id. at 14). This argument is misguided for

several reasons. First, “fairness” is not an element of Article III standing. Second, there can be no
dispute that at this moment in time Defendants, not Plaintiffs, are impeding the reimbursement
process, and that their failure to reimburse is injurious. And third, Defendants were afforded plenty
of time to reimburse Plaintiffs, as there was well over one month between their receipt of Plaintiffs’
expense documentation and the filing of this Motion. During that time, the PVHA Board of
Commissioners held a meeting and decided to file a Motion for Sanctions before reimbursing any
of Plaintiffs’ expenses.2 (Doc. No. 21-1 at ¶¶ 14–15). Defendants must live with the consequences
of that decision.
IV. CONCLUSION
For the reasons set forth above, Plaintiffs’ Motion is GRANTED; Plaintiffs may file their
proposed Second Amended Complaint on or before June 9, 2020. An Order follows.

Dated: 06/03/2020 /s/ Robert B. Kugler
ROBERT B. KUGLER
United States District Judge

2 It has now been almost four months since the Motion to Amend was filed, and over two months since the Court
dismissed Defendants’ Motion for Sanctions. During this time, neither Plaintiffs nor Defendants have informed the
Court of any reimbursement payments flowing between them.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10268317. Public record. Not legal advice.