OJO v. MILROSE 179 HARRISON, LLC

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

OLUKAYODE D. OJO and

OLATUNBOSUN G. OJO,

Plaintiffs,

Civ. No. 20-00949 (KM) (ESK)

v.

OPINION

MILROSE 179 HARRISON, LLC, and

EHRLICH, PETRIELLO, GUDIN, &

PLAZ,

Defendants.

KEVIN MCNULTY, U.S.D.J.:

The plaintiffs, Olukayode D. Ojo and Olatunbosun G. Ojo, rented an

apartment owned by Milrose 179 Harrison, LLC. Disputes arose over the

habitability of the apartment and the Ojos’ refusal to pay rent. Milrose, though

its counsel, Ehrlich, Petriello, Gudin, & Plaz, then initiated an action against

the Ojos in New Jersey landlord-tenant court, resulting in the Ojos vacating the

apartment. Now in this Court, the Ojos, proceeding pro se, have sued Milrose

and Ehrlich for claims arising from the disputes and the state landlord-tenant

case. Milrose and Ehrlich move to dismiss. (DE 17.)1 For the following reasons,

the motion to dismiss is GRANTED IN PART and DENIED IN PART.

1 Certain citations to the record are abbreviated as follows:

DE = docket entry

Compl. = Complaint (DE 1)

Mot. = Defendants’ Brief in Support of their Motion to Dismiss (DE 17-5)

Opp. = The Ojos’ Brief in Opposition to Milrose and Ehrlich’s Motion (DE 25)

Lease = Lease Agreement (DE 4-1)

Filing = Summary Dispossession Action Complaint (DE 4-3)

I. BACKGROUND

The allegations of the Complaint are assumed to be true for purposes of

this motion. See Section II, infra.

Milrose owned an apartment building in New Jersey. (Compl. ¶ 7.) The

Ojos signed a lease for a unit in that building in December 2017. (Id. ¶ 8.)

Beginning in July 2019, Milrose failed to maintain the premises or correct a

bed bug/vermin problem, and the Ojos repeatedly complained. (Id. ¶¶ 17–19.)

By December 2019, it became clear to the Ojos that Milrose would not

respond, so they withheld rent for that month. (Id. ¶ 22.) In response, Milrose

threatened to evict the Ojos, demanded rent exceeding the agreed-upon rent,

and threatened to charge additional fees. (Id. ¶ 23.) Then, Milrose hired the

Ehrlich law firm to initiate a summary dispossess action. (Id. ¶¶ 24–26.) The

Ojos did not appear but instead paid the rent and vacated the premises, so the

action was dismissed. (Id. ¶ 30; Filing at 1.)

The Ojos then sued Milrose and Ehrlich in this Court, asserting claims

for (1) breach of contract, (2) wrongful ouster, (3) negligence in maintaining the

apartment, (4) “refusal to repair the apartment” (a specific breach of contract),

(5) conspiracy, (6) violations of the Fair Debt Collection Practice Act (“FDCPA”),

15 U.S.C. §§ 1692–1692o, and the New Jersey Consumer Fraud Act (“NJCFA”),

N.J. Stat. Ann. § 56:8-1 et seq., and (7) violations of the Consumer Leasing Act

(“CLA”), 15 U.S.C. §§ 1667 et seq., and the New Jersey Truth-in-Renting Act

(“NJTIRA”), N.J. Stat. Ann. § 46:8-43 et seq. (Compl. ¶¶ 32–64.) The parties are

not of diverse citizenship, so the Ojos rely on federal-question and

supplementary jurisdiction. (Id. ¶¶ 2, 4–6.) Milrose and Ehrlich move to

dismiss.

II. STANDARD OF REVIEW

Federal Rule of Civil Procedure 8(a) does not require that a pleading

contain detailed factual allegations but “more than labels and conclusions.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must raise

a claimant’s right to relief above a speculative level, so that a claim is “plausible

on its face.” Id. at 570. That standard is met when “factual content [] 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). Rule 12(b)(6)

provides for the dismissal of a complaint if it fails to state a claim. The

defendant bears the burden to show that no claim has been stated. Davis v.

Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016). I accept facts in the complaint

as true and draw reasonable inferences in the plaintiff’s favor. Morrow v.

Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (en banc).

III. DISCUSSION

This case is a landlord-tenant dispute, in which state law claims

predominate; I state for the guidance of these pro se plaintiffs that, absent an

independent basis for federal-court jurisdiction, such claims would ordinarily

be filed in state court. I therefore assess first whether the federal FDCPA and

CLA claims, which would be the only source of federal jurisdiction, are

plausibly alleged. (Sections III.A, III.B) Because one such federal claim (the

FDCPA claim) is sufficiently alleged, I then proceed to analyze the state-law

causes of action. (Section III.C)

A. FDCPA

The Ojos assert a claim under the FDCPA.2

“The FDCPA protects against abusive debt collection practices by

imposing restrictions and obligations on third-party debt collectors.” Riccio v.

Sentry Credit, Inc., 954 F.3d 582, 585 (3d Cir. 2020) (en banc). “To prevail on

an FDCPA claim, a plaintiff must prove that (1) she is a consumer, (2) the

defendant is a debt collector, (3) the defendant’s challenged practice involves an

attempt to collect a ‘debt’ as the [FDCPA] defines it, and (4) the defendant has

violated a provision of the FDCPA in attempting to collect the debt.” Barbato v.

Greystone Alliance, LLC, 916 F.3d 260, 265 (3d Cir. 2019) (citation omitted).

2 The FDCPA is combined in Count 6 with a state law claim under the Consumer

Fraud Act, which is discussed separately herein. See Section III.C.5, infra.

Defendants do not dispute elements (1) and (3). (Mot. at 7.) The Ojos are

consumers. 15 U.S.C. § 1692a(3) (defining consumer as “any natural person

obligated to pay any debt”). Unpaid rent is a debt. Rodriguez v. Maharaj, Civ.

No. 20-04666, 2021 WL 508611, at *4 (D.N.J. Feb. 11, 2021) (collecting cases);

see 15 U.S.C. § 1692a(5) (defining debt as “any obligation to pay money arising

out of a transaction”). So the remaining issues are elements (2) and (4):

whether Milrose and Ehrlich are “debt collectors,” and whether the Ojos have

adequately alleged a violation of a section of the FDCPA.

Debt Collector

Milrose is not a debt collector, but Ehrlich is.

“Debt collector” can mean any person “who regularly collects or attempts

to collect, directly or indirectly, debts owed or due or asserted to be owed or

due another.” 15 U.S.C. § 1692a(6). “Creditors,” defined in part as those “to

whom a debt is owed,” id. § 1692a(4), are not considered “debt collectors.”

Tepper v. Amos Fin., LLC, 898 F.3d 364, 366 (3d Cir. 2018). This is because the

FDCPA is focused on “third party collection agents working for a debt owner—

not on a debt owner seeking to collect debts for itself.” Henson v. Santander

Consumer USA Inc., 137 S. Ct. 1718, 1721 (2017). Accordingly, landlords, like

Milrose, seeking to collect rent (a debt) owed directly to them from tenants are

creditors, not debt collectors. Rodriguez, 2021 WL 508611, at *4. The FDCPA

claim against Milrose will be dismissed.

Law firms acting on behalf of landlords, however, can qualify as debt

collectors. Id. The Supreme Court has held that “a lawyer who regularly tries to

obtain payment of consumer debts through legal proceedings is a lawyer who

regularly ‘attempts’ to ‘collect’ [] consumer debts” on behalf of a client. Heintz v.

Jenkins, 514 U.S. 291, 294 (1995). Reasoning from Heintz, the New Jersey

Supreme Court held that lawyers representing landlords in summary

dispossess actions are debt collectors. Hodges v. Sasil Corp., 915 A.2d 1, 10

(N.J. 2007). The court explained that “the summary dispossess action is [] a

powerful debt collection mechanism” and “designed to secure performance of

the rental obligation.” Id. (citation omitted). I am not bound by Hodges, which

is a state supreme court ruling on a question of federal law. See Surrick v.

Killion, 449 F.3d 520, 535 (3d Cir. 2006). I find Hodges persuasive, however,

and federal courts in this District have uniformly adopted the holding of

Hodges. Rodriguez, 2021 WL 508611, at *4; Livingstone v. Haddon Point

Manager, LLC, Civ. No. 19-13412, 2020 WL 902218, at *5 (D.N.J. Feb. 25,

2020); Crenshaw v. Computex Info. Servs., Inc., Civ. No. 10-1493, 2011 WL

1640175, at *4–5 (D.N.J. Apr. 30, 2011).

Accordingly, I find that Ehrlich is adequately alleged to have acted as a

debt collector when it represented Milrose in the summary dispossess action.

Drawing inferences in the Ojos’ favor, I can infer that summary dispossess

actions are part of Ehrlich’s practice, such that it “regularly” engages in that

debt collection activity. 15 U.S.C. § 1692a(6); Hodges, 915 A.2d at 10. Thus,

Ehrlich acted as a debt collector subject to the FDCPA.

FDCPA Violations

The Ojos must also allege that Ehrlich violated one or more of the

prohibitions contained in the FDCPA. Barbato, 916 F.3d at 265. The Complaint

is not as specific as it might be, but because the Ojos appear pro se, I construe

it liberally and “apply the applicable law, irrespective of whether the pro se

litigant has mentioned it by name.” Dluhos v. Strasberg, 321 F.3d 365, 369 (3d

Cir. 2003); see also Rodriguez, 2021 WL 508611, at *5 (analyzing pro se

complaint for FDCPA violations even when the complaint did not specify them).

In that process, I am aided by the Ojos’ brief, which identifies four claimed

FDCPA violations. (Opp. at 7.) I address each in turn, and find that two of them

may be plausibly inferred from the complaint.

a. § 1692d

The Ojos allege that Ehrlich violated § 1692d, which provides that “[a]

debt collector may not engage in any conduct the natural consequence of

which is to harass, oppress, or abuse any person in connection with the

collection of a debt.” Generally, a nonfrivolous lawsuit alone does not qualify as

harassing or abusive conduct. Shaw v. Hayt, Hayt & Landau, LLC, No. 20-cv-

00115, 2021 WL 531961, at *9 (W.D. Pa. Feb. 12, 2021); Harvey v. Great

Seneca Fin. Corp., 453 F.3d 324, 330 (6th Cir. 2006); see Gross v. Maitlin, 519

F. App’x 749, 751 (3d Cir. 2013) (per curiam) (“Maitlin’s court-authorized

attempt to collect a judgment does not constitute harassment or abuse in

violation of § 1692d.”). Here, Ehrlich had a valid reason for bringing a summary

dispossess action—the Ojos had stopped paying rent. There may have been

defenses to the state action, though the Ojos did not pursue them. Be that as it

may, I cannot say that an action to recover rent that concededly was not paid

crosses the line to harassment, oppression, or abuse. Thus, the Ojos fail to

state a § 1692d claim.

b. § 1692e

The Ojos allege that Ehrlich violated § 1692e, which provides that “[a]

debt collector may not use any false, deceptive, or misleading representation or

means in connection with the collection of any debt.” The Ojos seem to allege

that Ehrlich violated § 1692e by demanding, via the summary dispossess

action, excess rent and extra fees. (See Compl. ¶¶ 23, 28; Opp. at 7.) A legal

filing that misstates the amount owed can qualify as a false, deceptive, or

misleading representation. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 175,

177 (3d Cir. 2015), abrogated on other grounds by Obduskey v. McCarthy &

Holthus LLP, 139 S. Ct. 1029 (2019); see § 1692e(2)(A) (prohibiting the “false

representation of . . . [the] amount . . . of any debt”).

A complaint that seeks fees not contemplated by a debtor’s contract with

the creditor may mispresent the amount owed for purposes of § 1692e. See

Kaymark, 783 F.3d at 175 (foreclosure complaint that demanded attorney’s

fees calculated in a way contrary to the mortgage contract). Here, however, the

Lease provided that late fees and attorney’s fees could be charged along with

overdue rent. (Lease at 5, 22.) As a result, there was no § 1692e violation when

the summary dispossess filing sought those fees.

The demand for overdue rent presents a closer question. The summary

dispossess action sought $1,946.88, a sum represented to be the Ojos’ monthly

rent payment that was due on December 1, 2019. (Filing at 2.) The Complaint

alleges that the rent was $1,900, not $1,946.88, per month. (See Compl. ¶¶ 11,

23; Opp. at 3–4.)

Generally, when a communication sets forth a specific amount owed, and

the debtor does not actually owe that amount, there may be a § 1692e

violation, irrespective of the communicator’s knowledge of falsity. McLaughlin v.

Phelan Hallinan & Schmieg, LLP, 756 F.3d 240, 246 (3d Cir. 2014). Applying

that principle, courts have held that when a law firm claims in a court filing

that a tenant owes a certain amount of rent, but the amount is overstated, the

tenant has a claim that the firm falsely represented the amount of a debt, in

violation of § 1692e. Finch v. Slochowsky & Slochowsky, LLP, No. 19-CV-6273,

2020 WL 5848616, at *4 (E.D.N.Y. Sept. 30, 2020); Sanchez v. Ehrlich, No. 16-

cv-8677, 2018 WL 2084147, at *5 (S.D.N.Y. Mar. 29, 2018); Royal v. Duringer

L. Grp., PLC, No. 18-cv-00541, 2019 WL 1242447, at *3 (S.D. Cal. Mar. 18,

2019); cf. Psaros v. Green Tree Serv., LLC, Civ. No. 15-4277, 2015 WL 9412922,

at *5 (D.N.J. Dec. 21, 2015) (affidavit included with foreclosure action filing

that stated incorrect amount owed was actionable). Other courts, however,

have limited that principle, holding that attorneys are not liable for

representations in client affidavits as to the amount owed. Deere v. Javitch,

Block & Rathbone LLP, 413 F. Supp. 2d 886, 891 (S.D. Ohio 2006); Ducrest v.

Alco Collections, Inc., 931 F. Supp. 459, 462 (M.D. La. 1996). There is, to that

extent, a split in authority.

For my part, I am constrained by three principles to conclude that the

Ojos have stated a § 1692e claim against Ehrlich.

First, the Third Circuit’s standard for falsity is unforgiving. Put plainly, if

an amount demanded is inaccurate (or alleged to be inaccurate), it is

actionable. McLaughlin, 756 F.3d at 246. Contrary to the rule in some other

jurisdictions, I cannot now require a plausible factual allegation that Ehrlich

knew the correct rent amount. See Deere, 413 F. Supp. 2d at 891; Ducrest, 931

F. Supp. at 462. Although the result may seem harsh, it is a product of the

statutory language that renders the FDCPA “a strict liability statute to the

extent it imposes liability without proof of an intentional violation” Allen ex rel.

Martin v. LaSalle Bank, N.A., 629 F.3d 364, 368 (3d Cir. 2011), and “a

statement is either true or false,” Jensen v. Pressler & Pressler, 791 F.3d 413,

420 (3d Cir. 2015).3

Second, I must view Ehrlich’s representations from the perspective of the

least sophisticated consumer. Jensen, 791 F.3d at 420–22. From that

perspective, a consumer would not be able to understand that the rent

demanded was accurate. The filing only contains a conclusory statement that

$1,946.88 was the amount owed, and the balance sheet is more confusing than

clarifying because it shows a sudden jump in rent for December. The least

sophisticated consumer, with no more information than is in the balance sheet,

might well be confused as to why they owed that amount or could even perceive

that they were facing higher rent because of their nonpayment.4

Third, and most crucial, I must accept as true the Ojos’ allegations that

they did not owe the rent demanded in the summary dispossess action and

3 As one court explained, this interpretation furthers the statutory purpose:

[T]he statute places the burden on the debt collector to avoid collecting

debt improperly, including attempting to collect debt that is not actually

owed. A debt collector’s reliance on unverified information from the

client, without more, is particularly problematic in the landlord-tenant

context, where tenants risk not only damage to their credit, but possible

loss of their homes as a result of misstatements of debt owed, and where

landlords might profit from evicting tenants who pay below market rent.

Lee, 958 F. Supp. 3d at 531 n.2.

4 A false statement must also be “material when viewed through the least

sophisticated debtor’s eyes,” meaning “it has the potential to affect the decision-

making process of the least sophisticated debtor.” Jensen, 791 F.3d 421. An inflated

amount for the core debt obligation (rent) is material. The Ojos could reasonably have

believed, however, that the landlord was escalating the rent to coerce payment of

amounts not legitimately owed. Again, however, I address here only the adequacy of

the allegations; the actual facts must be developed through discovery.

that Milrose increased the rent in response to their complaints. Here, the

Complaint is frankly weak; it does not support any calculation of the correct

amount due or analyze the landlord’s calculation, but merely states that

$1,946.88 is too much.

Theoretically, I could resolve the issue based on documents properly

considered on a motion to dismiss, but the documents before me are not

sufficient for that purpose. The Lease that expired sometime before December

2019 had set the monthly rent at $1,800. (Lease at 2.) The balance sheet

attached to the summary dispossess filing shows that, for the prior six months,

Milrose had charged the Ojos monthly rent of $1,872. (Filing at 4.) Those

documents do not furnish a basis to look behind the Complaint’s allegation

that Ehrlich’s figure of $1,946.88 overstated the rent due.

Because the documents provided are insufficient to establish the correct

amount due, and because the Ojos appear pro se, I will construe the allegations

in their favor and find them sufficient. Cf. Hopkins v. I.C. Sys., Inc., Civ. No. 18-

2063, 2020 WL 2557134, at *12 (E.D. Pa. May 20, 2020) (disputes over amount

owed under the lease were questions of fact precluding summary judgment). It

may be that the defendants have an explanation for the calculation of the

figure, but that explanation does not appear on the face of the Complaint or in

the documents I may consider on a motion to dismiss.

Such explanations are therefore outside the scope of my current review.

Should the amount claimed be correct, that fact should be ascertainable and

provable by extrinsic evidence.5 Taking the allegations of the complaint as true,

however, the Ojos have stated an FDCPA claim based on a § 1692e violation.

5 Alternatively, at the stage of summary judgment or trial, even a bona fide error

in calculating the rent might support an affirmative defense to liability, “if the debt

collector shows by a preponderance of evidence that the violation was not intentional

and resulted from a bona fide error notwithstanding the maintenance of procedures

reasonably adapted to avoid any such error.” 15 U.S.C. § 1692k(c). It might also be

considered as a factor in fixing the amount of any liability. See § 1692(b)(2).

c. § 1692f

The Ojos allege that Ehrlich violated § 1692f, which provides that “[a]

debt collector may not use unfair or unconscionable means to collect or

attempt to collect any debt.” As with § 1692e, a debt collector violates § 1692f

when it attempts to collect amounts not owed. Kaymark, 783 F.3d at 175–76;

see also Finch, 2020 WL 5848616, at *4 (law firm violated § 1692f by bringing

housing court action seeking rent which tenant alleged she did not owe). Thus,

because the Ojos allege that they did not owe $1,946.88 in rent for December

2019, they have stated a § 1692f claim against Ehrlich.

d. § 1692g

The Ojos allege that Ehrlich violated § 1692g, which provides that a debt

collector must provide the consumer with certain information in a written

notice either as the initial communication or “[w]ithin five days after the initial

communication.” § 1692(a). Section 1692g further provides that if the

consumer disputes the debt, certain protections are unlocked. Riccio, 954 F.3d

at 588–89. In particular, if the consumer disputes the debt in writing within 30

days of receiving the notice, the debt collector must cease collection efforts

until verifying the debt with the creditor and providing verification information

to the consumer. Id.; see also § 1692g(b). The Ojos argue that Ehrlich violated

§ 1692g by (1) failing to send a written notice with the required information,

and (2) commencing the summary dispossession action before the 30-day

period had expired. (Opp. at 7.)

They are incorrect. Section 1692g is triggered only if there is an “initial

communication.” See § 1692(a) (listing information to be provided in “initial

communication” or within five days thereof); Sebrow v. Fein, Such, Kahn, &

Shephard, P.C., Civ. No. 10-215, 2010 WL 4553559, at *1 (D.N.J. Nov. 1, 2010)

(Sebrow I). By statute, however, “a formal pleading in a civil action shall not be

treated as an initial communication.” § 1692g(d). Accordingly, Ehrlich’s

summary dispossess filing cannot serve as an “initial communication” that

triggered § 1692g’s obligations. Sebrow I, 2010 WL 4553559, at *1.

The Complaint also alleges that the Ojos had a communication with

Ehrlich when they called Ehrlich’s offices and spoke with an employee about

their case. (Compl. ¶ 27.) The Ojos may be alleging that this phone call was

Ehrlich’s initial communication with them regarding their debt. Assuming that

is the theory, the Complaint fails to allege sufficient facts to support it. A debt

collector may comply with § 1692g if it provides the required information

during an oral initial communication. Sebrow v. Fein, Such, Kahn, & Shephard,

P.C., Civ. No. 10-215, 2011 WL 3439167, at *2 (D.N.J. Aug. 3, 2011) (Sebrow

II); see § 1692(a) (“[A] debt collector shall, unless the following information is

contained in the initial communication . . . , send the consumer a written

notice . . . .” (emphasis added)). The Complaint does not allege that the Ehrlich

employee failed to give the required information, see § 1692g(a)(1)–(5), so there

is no plausible § 1692g violation. Sebrow II, 2011 WL 3439167, at *2–3.

Likewise, the Complaint does not allege that the Ojos disputed the debt

in writing to Ehrlich (or disputed the debt at all), which would trigger the 30-

day period when collections must cease. Riccio, 954 F.3d at 588–89. As a

result, Ehrlich was under no obligation to pause the summary dispossess

action.

Accordingly, the Ojos have failed to state a § 1692g claim.

* * *

To recap, the Ojos have stated an FDCPA claim against Ehrlich for

violations of §§ 1692e and 1692f. The remaining FDCPA claims will be

dismissed.

B. CLA

The Ojos assert a CLA claim in Count 7. (Compl. ¶¶ 60–64.) The CLA

imposes disclosure requirements on “consumer leases.” Miller v. Nissan Motor

Acceptance Corp., 362 F.3d 209, 216 (3d Cir. 2004). A “consumer lease” in

pertinent part “means a contract in the form of a lease or bailment for the use

of personal property.” § 1667(1). “Personal property” does not include “real

property.” § 1667(4). Because the Ojos’ Lease concerned the use of real, not

personal, property, their Lease was not subject to the CLA.

Accordingly, to the extent Count 7 asserts a CLA claim, it will be

dismissed.

C. State-Law Claims

Moving to the state-law claims, I address some preliminary matters

(Section III.C.1), before proceeding to the merits (Section III.C.2–7).

Preliminary Matters

a. Supplemental jurisdiction

The Court is always obligated to examine its own subject matter

jurisdiction. As noted above, the parties are not alleged to be of diverse

citizenship, so diversity jurisdiction does not attach. See 28 U.S.C. § 1332(a). I

have found, however, that the Complaint states a federal FDCPA claim against

Ehrlich. A federal cause of action, of course, gives rise to federal-question

jurisdiction. 28 U.S.C. 1331. Where federal question jurisdiction exists, a

federal court may assert supplemental jurisdiction over associated state-law

claims “that are so related to claims in the action within such original

jurisdiction that they form part of the same case or controversy under Article III

of the United States Constitution.” 28 U.S.C. § 1367(a).

The Ojos’ state claims arise from the same landlord-tenant dispute and

litigation that underlie the federal FDCPA claim. But if I may put it this way,

the federal claim, on which this court’s jurisdiction depends, is hanging by a

thread. The § 1692e and § 1692f theories are not very clearly alleged and

frankly have benefited from the leeway given to pro se pleadings. See

discussion supra.

The federal FDCPA claim, moreover, applies only to Ehrlich; Milrose,

which is alleged to be the primary wrongdoer, is not liable under the FDCPA.

The state claims are the other way around; looking ahead, I find Milrose

potentially liable for the state claims, but have dismissed them against Ehrlich.

Thus, as to Ehrlich, this is a pure federal-law case, but as to Milrose it is a

pure state-law case. Now it is true that supplemental jurisdiction “shall include

claims that involve the joinder or intervention of additional parties.” 28 U.S.C.

§ 1367(a). Still, the connection between the federal and state claims is

weakened by the lack of overlap in parties.

So, without prejudging the matter, I caution these pro se plaintiffs that if

the federal claim should prove to be unsupported, the Court may be

constrained to dismiss the state claims as well. See 28 U.S.C. § 1367(c).

b. Rooker-Feldman

This Court is not empowered to hear appeals from state court judgments.

The existence of a prior, completed state-court action thus implicates the

Rooker-Feldman doctrine, under which “federal district courts are not amenable

to appeals from disappointed state court litigants.” Malhan v. Sec’y U.S. Dep’t of

State, 938 F.3d 453, 458 (3d Cir. 2019). At the outset, I must assure myself

that Rooker-Feldman does not apply before exercising jurisdiction over the case.

See Great W. Mining & Min. Co. v. Fox Rothschild LLP, 615 F.3d 159, 163 (3d

Cir. 2010). The doctrine applies to “[1] cases brought by state-court losers [2]

complaining of injuries caused by state-court judgments [3] rendered before the

district court proceedings commenced and [4] inviting district court review and

rejection of those judgments.” Malhan, 938 F.3d at 458 (citation omitted).

The first and third elements are arguably met because the Ojos

commenced this litigation two days after they voluntarily dismissed the

landlord-tenant case. See id. at 459 (Rooker-Feldman applies when “the state

action has reached a point where neither party seeks further action” including

a “voluntary termination” (citation omitted)).

The second and fourth elements are not met, however. Taking to heart

the Third Circuit’s admonition that the doctrine be applied narrowly, I observe

that this federal action is not attacking or seeking to reverse the state-court

judgment as such. See Great W. Mining, 615 F.3d at 167. Rather, the

Complaint largely seeks compensatory damages based on Milrose’s actions

(primarily, its failure to maintain the premises). Thus, Rooker-Feldman does not

deprive me of jurisdiction.

c. Entire Controversy Doctrine

Milrose and Ehrlich argue that the Ojos had an opportunity to seek “a

rent abatement or any such relief from the alleged conditions of their tenancy”

in the landlord-tenant action, but “[b]y failing to appear, their right to seek an

abatement of rent from Defendant Milrose was effectively waived.” (Mot. at 11–

12.) This might be taken as an argument (or perhaps the reservation of an

argument) that the dismissal of the landlord-tenant action has preclusive

effect. This argument fails, at least at the motion to dismiss stage, for two

reasons.

First, it is not adequately raised. Preclusion, which for New Jersey

judgments is most broadly applied under the entire controversy doctrine, is an

affirmative defense. Rycoline Prods., Inc. v. C & W Unlimited, 109 F.3d 883, 886

(3d Cir. 1997). As such, it must be raised a way that “gives fair notice of that

defense.” In re Frescati Shipping Co., 886 F.3d 291, 313 (3d Cir. 2018), aff’d

sub nom. CITGO Asphalt Refining Co. v. Frescati Shipping Co., 140 S. Ct. 1081

(2020). Milrose and Ehrlich cite no legal basis for their argument, and do not

cite any claim preclusion doctrine specifically. See id. (defense not adequately

raised when there was no “specific citation to the . . . defense or even a

description of the nature of the defense”). Moreover, there is a particular

danger that the Ojos would be prejudiced if I dismissed based on the defense.

To begin with, they appear pro se, heightening the need for defendants to

identify their defenses and articulate them clearly. And of course, because the

preclusion doctrines are affirmative defenses, they must be applied cautiously

at the motion-to-dismiss stage, and based on the face of the complaint itself.

See Rycoline, 109 F.3d at 886 (holding that if affirmative defense “is not

apparent on the face of the complaint, then it may not afford the basis for a

dismissal of the complaint under Rule 12(b)(6)”). That is not the case here.

Second, and regardless, the entire controversy doctrine’s application here

is doubtful. True, the doctrine is “an extremely robust claim preclusion device

that requires adversaries to join all possible claims stemming from an event or

series of events in one suit.” Chavez v. Dole Food Co., 836 F.3d 205, 228 n.130

(3d Cir. 2016) (en banc) (citation omitted). But the doctrine’s “preclusive effect

is limited to claims that could have been brought in the prior action.” Smith v.

Hillside Village, 279 F. Supp. 3d 537, 547 (D.N.J. 2017). Under the New Jersey

court rules, the Ojos were prevented from raising most counterclaims in the

course of defending a summary dispossess proceeding. Id. (citing N.J. Ct. R.

6:3-4). Although a tenant may raise a habitability defense, Daud v. Mohammad,

952 A.2d 1091, 1092 (N.J. Super. Ct. App. Div. 2008), there is support for the

proposition that, given the restricted nature of such proceedings, they have no

preclusive effect, C. F. Seabrook Co. v. Beck, 417 A.2d 89, 96 (N.J. Super. Ct.

App. Div. 1980); see Berzito v. Gambino, 308 A.2d 17, 22 (N.J. 1973) (allowing

tenants to seek rent paid prior to court’s ruling in summary dispossess action

that the landlord had breached the warranty of habitability). At any rate, the

allegations here appear to exceed the bounds of abatement of rent; the Ojos

seek compensatory damages in an amount of not less than $500,000.

At the very least, then, the applicability of the entire controversy doctrine

or other preclusion doctrines cannot be conclusively determined from the face

of the Complaint. I therefore deny the motion to dismiss on those grounds, and

turn to the substance of the state-law claims.

Breach of Contract

The Ojos assert breach of contract claims in Counts 1 and 4. (Compl.

¶¶ 32–35, 49.) The contract in question is the Lease.

At the outset, the claims fail against Ehrlich because Ehrlich is not a

party to the Lease. Aronsohn v. Mandara, 484 A.2d 675, 680 (N.J. 1984).

Ehrlich possessed no obligations under the Lease, and therefore could not have

breached them. As to Ehrlich, then, Counts 1 and 4 are dismissed.

Turning to Milrose, the Ojos must establish “(1) the existence of a valid

contract between the parties; (2) failure of the defendant to perform its

obligations under the contract; and (3) a causal relationship between the

breach and the plaintiff's alleged damages.” Mid-Atl. Salt, LLC v. Morris Cnty.

Coop. Pricing Council, 964 F.3d 218, 226 (3d Cir. 2020) (citation omitted). The

first element is not disputed. The Ojos and Milrose had a written lease that ran

through at least November 30, 2018. (Lease at 2.) The Ojos continued to live in

the apartment, and they paid rent until December 2019. It is not clear that the

Lease had been renewed at that point, but if not, there is at least an inference

to be drawn of a month-to-month tenancy. See N.J. Stat. Ann. § 46:8-10.

Under a month-to-month tenancy, the parties’ obligations to one another as

stated in the Lease would have continued. J.M.J. N.J. Props., Inc. v. Khuzam,

839 A.2d 102, 107 (N.J. Super. Ct. App. Div. 2004). Thus, the parties had a

valid contract imposing mutual obligations throughout the relevant period.

Next, the Ojos allege that Milrose breached the Lease/contract by failing

to fulfil its obligations to maintain the premises and make repairs. (Compl.

¶ 33.) At this stage, it is not necessary to analyze the particulars of this Lease.

Residential leases in New Jersey are deemed to contain “an implied covenant of

habitability” that obligates the landlord to maintain the premises. Dowler v.

Boczkowski, 691 A.2d 314, 319 (N.J. 1997). That obligation survives and

continues through a month-to-month tenancy. See J.M.J., 839 A.2d at 107.

The Complaint alleges facts, such as a bed bug infestation, that would

plausibly support an inference that Milrose did not fulfil its obligations.

(Compl. ¶ 18.) At a minimum, then, the Ojos have alleged a breach of the

implied covenant of habitability. The motion to dismiss Counts 1 and 4, as

against Milrose only, is denied.

Wrongful Ouster

The Ojos assert a claim (Count 2) that they were “wrongfully ousted”

from the apartment. (Compl. ¶ 38.) (Similar language also appears in Count 1,

but I deal with it here, where it stands alone.) The precise legal basis for this

claim is unclear. There is no cause of action for “wrongful ouster” per se in New

Jersey. The likely explanation is that New Jersey is an anti-eviction state,

which provides protections greater than those of tort law. By statute, a landlord

cannot evict a tenant without showing good cause to a court in a summary

dispossess action and obtaining a judgment of possession. 147 Broadway Corp.

v. Robinson, 2008 WL 2663751, at *2 (N.J. Super. Ct. App. Div. July 9, 2008)

(per curiam) (citations omitted), Hale v. Farrakhan, 915 A.2d 581, 584 (N.J.

Super. Ct. App. Div. 2007); N.J. Stat. Ann. § 2A:39-1. Here, the landlord

brought such an action and the Ojos obtained dismissal of it by paying the rent

and vacating the apartment.

There is, however, one potentially applicable cause of action.6 A tenant

may sue a landlord for instituting a summary dispossess action “[a]s a reprisal

for the tenant’s efforts to secure or enforce any rights under the lease or

contract, or under the laws of the State of New Jersey.” N.J. Stat. Ann. § 2A:42-

10.10(a). The Complaint alleges that Milrose brought the summary dispossess

action to “retaliate” against the Ojos for complaining about the state of the

premises. (Compl. ¶¶ 24–25, 38.) Accordingly, the Ojos have pleaded a claim

that the summary dispossess action was brought in reprisal for their efforts to

enforce their right to habitability.

To be sure, the landlord has its own story to tell, in that the summary

dispossess action followed nonpayment of rent. Still, retaliation may be found

even if “other factors may also be present or even dominant.” Les Gertrude

Assocs. v. Walko, 621 A.2d 522, 525 (N.J. Super. Ct. App. Div. 1993) (citation

omitted). At the pleading stage, I can infer that the Ojos’ complaints were one

6 Other possible causes of action do not fit the allegations here. One applies when

a landlord displaces tenants based on a false representation that the property is

required for the landlord’s own use. N.J. Stat. Ann. § 2A:18-61.6. Another cause of

action is for unlawful detainer, where a landlord enters and occupies a property

without obtaining a judgment of possession. Id. §§ 2A:39-1, 2A:39-8; Levin v. Lynn,

708 A.2d 454, 457–58 (N.J. Super. Ct. App. Div. 1998).

motivating factor. Thus, the Complaint states a § 2A:42-10.10(a) claim in

Count 2 against Milrose.

Ehrlich, however, was not the Ojos’ landlord. Setting aside mere legal

conclusions, the factual allegations of the Complaint set forth only that Ehrlich

acted as Milrose’s attorney in the landlord-tenant case. To the extent Count 2

is asserted against Ehrlich, it will be dismissed.

Negligence

The Ojos assert a claim (Count 3) that Milrose was negligent in

maintaining the premises. (Compl. ¶ 45.) “The fundamental elements of a

negligence claim are a duty of care owed by the defendant to the plaintiff, a

breach of that duty by the defendant, injury to the plaintiff proximately caused

by the breach, and damages.” Shields v. Ramslee Motors, 223 A.3d 172, 176

(N.J. 2020) (citation omitted). A landlord has a duty to “maintain the premises

in a reasonably safe condition for the use and enjoyment of tenants and their

guests. Such maintenance includes . . . attentive repair work.” Anderson v.

Sammy Redd & Assocs., 650 A.2d 376, 378 (N.J. Super. Ct. App. Div. 1994).

The Ojos plausibly allege that Milrose breached that duty by failing to repair

the premises after repeated complaints. See Dwyer v. Skyline Apartments, Inc.,

301 A.2d 463, 465 (N.J. Super. Ct. App. Div. 1973) (failure to repair after notice

is a breach). They allege injury, proximate cause, and damages because their

furniture and clothing were “damaged and destroyed” (from bed bugs, I can

infer), they were otherwise deprived of the full enjoyment of their property

(Compl. ¶ 29), and they suffered other forms of property damage and emotional

distress (id.; see also Prayer for Relief). Accordingly, the Ojos have stated a

negligence claim against Milrose, and as to Milrose, the motion to dismiss is

denied.

Ehrlich, however, was not the Ojos’ landlord, and had no duty to

maintain the premises. To the extent to the negligence claim (Count 3) is

asserted against Ehrlich, it will be dismissed.

NJCFA

Count 6 contains, in addition to the FDCPA claim, a claim under the New

Jersey Consumer Fraud Act. (Compl. ¶ 58.)

The NJCFA “provides a remedy for any consumer who has suffered an

ascertainable loss of moneys or property as a result of an unlawful commercial

practice.” Heyert v. Taddese, 70 A.3d 680, 694 (N.J. Super. Ct. App. Div. 2013).

The NJCFA applies to landlords of large buildings. Id. at 695. “The NJCFA

requires a plaintiff to prove three elements: (1) unlawful conduct by the

defendant; (2) an ascertainable loss by the plaintiff; and (3) a causal connection

between the defendant’s unlawful conduct and the plaintiff’s ascertainable

loss.” CDK Glob., LLC v. Tulley Auto. Grp., Inc. --- F. Supp. 3d ----, ----, Civ. No.

15-3103, 2020 WL 5743072, at *17 (D.N.J. Sept. 25, 2020) (quotation marks

and citation omitted).

The first, unlawful-conduct element is not met by, for example, an

ordinary breach of contract or warranty. See Cox v. Sears Roebuck & Co., 647

A.2d 454, 462 (N.J. 1994) (simple breach of contract or warranty will not

support NJCFA claim). Nor has the CFA been permitted to subsume ordinary

landlord-tenant disputes; “the Consumer Fraud Act will only apply to extreme

conduct of landlords.” 49 Prospect St. Tenants Ass’n v. Sheva Gardens, Inc.,

547 A.2d 1134, 1144 (N.J. Super. Ct. App. Div. 1988). Applying those

principles, I find that the first element is inadequately pleaded. For example,

there is no allegation that the landlord imposed charges not permitted by law.

See Heyert, 70 A.3d at 696 (charging rent above rent ordinance’s limits was

unlawful practice). Nor is there any allegation that the landlord illegally

withheld services in order to drive the tenants from the building. 49 Prospect,

547 A.2d at 1142 (landlord’s failure to maintain apartment building in effort to

induce tenants to move out was unlawful practice).

The third, ascertainable-loss element is also lacking. For a NJCFA claim,

generalized allegations of compensable damages do not suffice. “At the pleading

stage, plaintiffs must provide a reasonable valuation that quantifies the

difference in value between the promised product and the actual product

received.” Matrix Distribs. v. Nat’l Ass’n of Bds. of Pharm., Civ. No. 18-17462,

2020 WL 7090688, at *18 (D.N.J. Dec. 4, 2020) (quotation marks, alteration,

and citation omitted), appeal docketed, No. 20-3638 (3d Cir. Dec. 31, 2020).

For habitability-type claims, this can mean a calculation of the diminution in

value of the apartment, damages for time lost in the apartment, and costs of

ameliorative efforts. 49 Prospect, 547 A.2d at 1140; Harmon v. Biltmore Realty

Co., LLC, No. A-2186-16T2, 2018 WL 5091900, at *6 (N.J. Super. Ct. App. Div.

Oct. 19, 2018) (per curiam). The Complaint attempts no such estimate. Rather,

the Complaint broadly seeks “economic damages” and damages for “emotional

trauma” to the tune of at least $500,000. (Compl. ¶¶ 59, Prayer (G).) For

purposes of the NJCFA, that does not meet the standard of an “ascertainable

loss.”

Accordingly, the NJCFA claim contained in Count 6 will be dismissed.

Conspiracy

The Ojos assert a claim (Count 5) that Milrose and Ehrlich conspired to

levy additional rent charges and file the retaliatory summary dispossess action.

(Compl. ¶¶ 51–53.) A civil conspiracy is “combination of two or more persons

acting in concert to commit an unlawful act, or to commit a lawful act by

unlawful means, the principal element of which is an agreement between the

parties to inflict a wrong against or an injury upon another, and an overt act

that results in damage.” LoBiondo v. Schwartz, 970 A.2d 1007, 1029–30 (N.J.

2009). The conspiracy claim fails for two reasons.

First, New Jersey has not recognized a conspiracy claim between a law

firm and its corporate client. A corporation cannot conspire with its agents.

Tynan v. Gen. Motors Corp., 591 A.2d 1024, 1032 (N.J. Super. Ct. App. Div.

1991), rev’d in part on other grounds, 604 A.2d 99 (N.J. 1992); see also, e.g.,

Carifi v. Barberio, No. A-0597-17T1, 2020 WL 7330081, at *18 (N.J. Super. Ct.

App. Div. Dec. 14, 2020); Marrin v. Capital Health Sys., Civ. No. 14-2558, 2015

WL 404783, at *10 (D.N.J. Jan. 29, 2015). An attorney acts as an agent for his

or her client. Cohen v. Southbridge, 848 A.2d 781, 784 (N.J. Super. Ct. App.

Div. 2004). It stands to reason, then, that an attorney’s mere representation of

his or her client in litigation does not amount to a conspiracy. Sun Pharms.

Indus., Inc. v. Core Tech Sols., Inc., Civ. No. A-0646-11T4, 2013 WL 1942619, at

*20 (N.J. Super. Ct. App. Div. May 13, 2013) (per curiam); see Heffnan v.

Hunter, 189 F.3d 405, 413 (3d Cir. 1999) (recognizing this principle under

federal law); Am. Law Inst., Restatement (Third) of Torts: Liab. for Econ. Harm

§ 27 cmt. d (2020) (recognizing this principle under general tort law). Indeed,

the Ojos point to no New Jersey case recognizing a law firm/corporate client

conspiracy, and I could locate none.7 I decline to recognize their novel theory.

See City of Philadelphia v. Beretta U.S.A. Corp., 277 F.3d 415, 421 (3d Cir.

2002) (“[I]t is not the role of a federal court to expand state law in ways not

foreshadowed by state precedent.”).

Second, even setting aside that legal infirmity, the Complaint does not

plausibly allege a conspiratorial agreement. Conspirators must “understand

the general objectives of the scheme, accept them, and agree, either explicitly

or implicitly, to do [their] part to further them.” Banco Popular N. Am. v. Gandi,

876 A.2d 253, 263 (N.J. 2005) (citation omitted). The Complaint only alleges in

conclusory fashion that Milrose and Ehrlich “conspired” together. (Compl.

¶ 24.) There are no facts indicating an agreement to do something wrongful—

7 Indeed, a corporate body, unlike a natural person, can only appear in court by

counsel. See N.J. Ct. R. 1:21-1(c) (“[A]n entity, however formed and for whatever

purpose, other than a sole proprietorship shall neither appear nor file any paper in

any action in any court of this State except through an attorney authorized to practice

in this State.”); see generally 19 C.J.S. Corporations § 785. That legal reality severely

undercuts the plausibility of any inference that, merely by hiring counsel, the

corporation enlisted a co-conspirator in its scheme. The Ojos’ theory here, taken to its

logical conclusion, would entail a self-proving conspiracy every time a corporation’s

position in litigation was found to be wrongful. Compare Banco Popular North America

v. Gandi, in which the New Jersey Supreme Court, based on various facts, recognized

a conspiracy between an individual and his lawyer. 876 A.2d 253, 263 (N.J. 2005). As

the Appellate Division explained, in Banco, “lawyers were alleged to have engaged in

civil conspiracies with their individual clients; they were not acting on behalf of a

corporation as its employee or agent.” Sun Pharms., 2013 WL 1942619, at *20.

only an agreement by Ehrlich to represent Milrose in litigation based on rent

which had not been paid. True, Ehrlich’s pleading allegedly asked for rent that

exceeded the amount due. See Section III.A, supra. But that is a far cry from an

agreement to cause harm. See Banco, 876 A.2d at 263.

For these reasons, the conspiracy claim (Count 5) will be dismissed.

NJTIRA

The Ojos assert an NJTIRA claim in Count 7, alleging that Milrose failed

to disclose that the property was infested. (Compl. ¶ 63.) The NJTIRA, however,

only requires that landlords provide tenants a statement prepared by the

Department of Community Affairs regarding tenant rights under New Jersey

law. N.J. Stat. Ann. §§ 46:8-45, 46:8-46; see also Dep’t of Cmty. Affairs, Truth

In Renting: A guide to the rights and responsibilities of residential tenants and

landlords in New Jersey,

https://www.nj.gov/dca/divisions/codes/publications/pdf_lti/t_i_r.pdf. Thus,

there is no NJTIRA violation for failing to disclose information apart from that

required by the DCA statement.

Thus, the motion to dismiss the Count 7 NJTIRA claim is granted.

IV. CONCLUSION

For the reasons set forth above, the motion to dismiss is granted in part

and denied in part. Counts 5 (conspiracy) and 7 (CLA, NJTIRA) are dismissed

in their entirety. Counts 1–4 (breach of contract, wrongful ouster, negligence,

refusal to repair) are dismissed insofar as those Counts are asserted against

Ehrlich. Count 6, to the extent it asserts an FDCPA claim against Milrose, is

dismissed. Count 6, to the extent it asserts an NJCFA claim against both

defendants, is dismissed. The motion is otherwise denied.

A separate order will issue.

Dated: March 4, 2021

/s/ Kevin McNulty

___________________________________

Hon. Kevin McNulty

United States District Judge