Florence

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

EASTERN DIVISION

JOHNAY FLORENCE, et al.,

Plaintiffs,

Case No. 2:24-cv-4079

v.

JUDGE DOUGLAS R. COLE

VINEBROOK HOMES TRUST, Magistrate Judge Vascura

INC., et al.,

Defendants.

OPINION AND ORDER

Johnay Florence, Ursula Jones, and Summer Milligan, the named plaintiffs in

this putative class action, bring suit against their former landlord and its related

corporate entities.1 (Second Am. Compl., Doc. 24, #636–43). Acting on behalf of

themselves and similarly situated individuals, Plaintiffs challenge as unlawful three

separate fee provisions in their residential leases. (Id. at #644–50). Citing pleading

defects, Defendants2 now move to dismiss all of Plaintiffs’ claims against them. (Doc.

28). For the reasons discussed below, the Court GRANTS Defendants’ Motion to

Dismiss (Doc. 28).

1 There is one exception. Defendant Hunter Warfield, Inc. (HW), is not part of the VineBrook

corporate family. HW is a licensed debt collector that the landlord used to collect a consumer

debt allegedly owed by Plaintiff Summer Milligan. (Doc. 24, #643, 655–57). Alleging that

HW’s conduct violates the Fair Debt Collection Practices Act, 15 U.S.C. § 1692–1692p,

Plaintiffs pursue a separate “Class and Individual” count against it. (Id. at #674–76).

2 Hunter Warfield is not a party to the present motion.

BACKGROUND3

The various Defendants that bring this motion—VineBrook Homes Trust, Inc.

(VHTI); VineBrook Homes Operating Partnership, L.P. (VHOP); Vinebrook Homes,

LLC (VHLLC); NREA VB V, LLC; VB Six, LLC; and VineBrook Homes Borrower 1,

LLC (collectively VineBrook or VineBrook Defendants)—are a network of businesses

that own, manage, and lease out approximately 21,104 single-family residences

(SFRs) nationwide—including 7,327 residences located in the Columbus, Cincinnati,

and Dayton markets. (Doc. 24, #638–43). The three named plaintiffs—Florence,

Jones, and Milligan—are all former Ohio VineBrook tenants. (Id. at #635–38).

Plaintiffs’ core charge is that VineBrook included several unlawful terms in Plaintiffs’

respective leases. Those leases, known as “VineBrook Home Lease Agreements”

(VBHLAs), (id. at #636–37), were “pre-prepared, form boilerplate, lease agreements,”

signed by all tenants at VineBrook properties, (id. at #644). Hence, Plaintiffs bring

this proposed class action. Complicating matters on that front, though, Defendants

modified their standard lease in August 2024, with Florence and Jones signing an

earlier version of the standard lease, and Milligan signing a later one. The Court

follows the parties’ lead and refers to the two versions as the Pre-August 2024

VBHLA and the Post-August 2024 VBHLA. (Id. at #644, 647).

3 Because this matter is before the Court on Defendants’ motion to dismiss, the Court must

accept the well-pleaded allegations in the operative complaint as true. Bassett v. Nat’l

Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th Cir. 2008). So while the Court relies on that

complaint’s allegations to recount the case’s background, it reminds the reader that they are

just that—allegations.

Plaintiffs challenge two provisions in the Pre-August 2024 VBHLA: a Property

Administration Fee (PAF) provision and an attorney’s fees provision. While the Post-

August 2024 VBHLA omits those two provisions, Plaintiffs challenge a new provision

from that lease—a Utility and Additional Rent Addendum (UARA).

Start with the Property Administration Fee. Under that provision, residents

must pay $10 each month to help cover the cost of repairs and maintenance on the

property:

PROPERTY ADMINISTRATION FEE: Resident(s) hereby agrees to pay

a monthly Property Administration Fee of ten dollars ($10.00). Such fee

must be paid in full by the first day of each month along with other

monthly charges. This fee is nonrefundable and additional to the

monthly rent charges. The Property Administration Fee is being

assessed to help Lessor pay for the costs associated with maintenance,

repairs, and damages to the property based by natural and unnatural

events along with general use of the property. Failure to pay the

Property Administration Fee as part of monthly charges can result in a

late fee and constitutes a default under this Lease.

(Id. at #644). While the PAF provision represents that the fee will “help the Lessor

pay for the costs associated with maintenance, repairs, and damages,” Plaintiffs say

that is not in fact the case. Rather, VineBrook uses the funds to purchase insurance

policies covering their own “interests” in the SFRs. (Id. at #652). VineBrook receives

“certain financial incentives” for purchasing those policies. (Id.). And VineBrook

diverts some of the funds to “other financial benefits inuring only to [VineBrook].”

(Id. at #654). Importantly, though, the complaint does not state exactly what those

nebulous “interests,” “financial incentives,” or “financial benefits” might entail. In

any event, Plaintiffs further allege that the Post-August 2024 VBHLAs “were

purposely modified to remove the PAF provision,” but that VHOP and VHLLC

nonetheless continued to collect the $10 monthly fees. (Id. at #662). Relying on those

various “misrepresentations,” Plaintiffs bring a fraud-based RICO claim. (Id. at

#661–63). Finally, Plaintiffs also claim that, even apart from the misrepresentation

aspect, Ohio law prevents landlords from imposing a Property Administration Fee

because such a fee requires tenants to assume a liability that the law assigns to

landlords. (Id. at #645 & n.2).

Next is the Pre-August 2024 VBHLAs’ second allegedly problematic term: a

provision that seems to allow VineBrook to recover attorney’s fees incurred in

connection with an eviction:

In the event Lessee is in default, Lessor has the following

recourse … [s]ubject to state law, Lessee will be liable for: … All costs

associated with the eviction of Lessee, including any and all lease

reinstatement fees or legal fees or attorney fees. Lessor will assess a

minimum charge of three hundred, fifty dollars ($350.00).

(Id. at #646, 695). Plaintiffs characterize this as an “attorney fee recovery provision,”

and allege that it too violates Ohio law. (Id. at #647). That is because, according to

Plaintiffs, any agreement by which a tenant agrees to pay a landlord’s attorney’s fees

violates Ohio Revised Code § 5321.13(C). (Id. at #647).

VineBrook used this same Pre-August 2024 VBHLA form—including both the

PAF provision and the attorney’s fees provision—on a continuous basis for all SFRs

it owned, managed, or leased from November 2018 through approximately August 6,

2024. (Id. at #647). Since 2018, thousands of tenants (including Florence and Jones)

have signed those leases and paid the monthly PAF and faced potential exposure to

the attorney’s fees provision if evicted. (Id. at #651).

Turn now to the Post-August 2024 VBHLA. VineBrook started using it on

August 6, 2024. (Id. at #647). As mentioned, it omits the two offending provisions

from the previous version of the lease. (Id. at #647). But, according to Plaintiffs,

despite removing the PAF provision, VineBrook “intentionally continued to charge

and collect the PAFs from VineBrook Defendants’ tenants,” including Milligan. (Id.

at #654).

Beyond that, the Post-August 2024 VBHLAs include the new offending UARA

provision. (Id. at #649). Under the UARA, VineBrook engages Conservice as a third-

party billing agent for utility services provided to tenants—including water, sewer,

stormwater, trash, gas, and electricity. (Id.). Conservice charges tenants a $30.00 “Set

Up Fee” and up to $9.99 per month as a “Monthly Service Fee.” (Id.). While it is

Conservice that charges and collects these fees, not VineBrook, Plaintiffs argue that

Conservice does so as VineBrook’s agent. (Id. at #649–50). Once again, Plaintiffs say

that collecting such fees violates Ohio law.

The Court now turns to the individual Plaintiffs. Johnay Florence previously

executed two sequential Pre-August 2024 VBHLAs with VB Six, LLC, for a single-

family residence located in Columbus, Ohio. (Id. at #689–717 (attaching leases)).

Those leases contained the offending PAF and attorney’s fees provisions. (Id.). The

first lease ran for a one-year term beginning on or around April 21, 2023, with a base

monthly rent of $1,250.00, plus a $10.00 PAF, for a total monthly charge of $1,260.00.

(Id. at #685, 689, 691). The second lease ran for a one-year term beginning on or

around April 26, 2024, with a base monthly rent of $1,325.00, plus the same $10.00

PAF. (Id. at #685, 706). Florence paid her monthly rent and the PAF throughout both

leases. (Id. at #637). During her tenancy, Florence contacted VineBrook to request

various (unnamed) repairs and maintenance, but VineBrook failed to make those

repairs. (Id. at #685). Based on that, she claims that Defendants failed to maintain

her residence in the fit and habitable condition Ohio law requires. (Id. at #685).

Ursula Jones executed a Pre-August 2024 VBHLA with NREA VB V, LLC, for

a single-family residence in Huber Heights, Ohio. (Id. at #637). That lease was for a

one-year term beginning on or around February 27, 2024, imposing a base monthly

rent of $1,050.00 plus the $10.00 PAF, which Jones paid. (Id. at #637, 718–29

(attaching lease)). That lease likewise contained PAF and attorney’s fees provisions.

(Id.). Like Florence, Jones contacted VineBrook to request repairs and maintenance

during her tenancy, which VineBrook failed to make. (Id. at #686).

Summer Milligan executed a Post-August 2024 VBHLA with VineBrook

Homes Borrower 1, LLC, for a single-family residence in Columbus, Ohio. (Id. at

#637–38). That lease was for a one-year term beginning on November 21, 2024, with

a base monthly rent of $1,125.00. (Id. at #730–59 (attaching lease)). Milligan paid

VineBrook a security deposit of at least $1,125.00 and moved into the residence on

December 7, 2024. (Id. at #655).

Like other Post-August 2024 VBHLAs, Milligan’s lease did not contain the PAF

or attorney’s fees provisions. It did, however, contain the UARA. (Id. at #649, 750–

53). And, as described above, under the UARA, Conservice administered and billed

Milligan for certain utility services—specifically water, sewer, and trash—for which

VineBrook remained the customer of record. (Id. at #649). Conservice also charged

Milligan a one-time $30.00 account set-up fee and a monthly $9.99 service fee. (Id. at

#649–50).

However, Milligan’s tenancy did not last the full year. “[I]mmediately upon

moving in, and for the next two [] months, … Milligan was confronted with numerous

problems including but not limited to: misrepresentations about appliances, and the

provision of appliances, hazardous mold growth, and insect infestation.” (Id. at #655).

The landlord “either ignored or refused” Milligan’s demands for remediation, so she

was compelled to depart the premises on February 12, 2025, as the property was not

reasonably habitable. (Id.).

On March 12, 2025, VineBrook sent Milligan a “Move Out Statement” showing

several charges, including a $13.55 PAF (and recall that her lease did not include a

PAF), set off against her security deposit, leaving Milligan owing an alleged balance

of $867.29. (Id. at #656). By the end of the month, VineBrook had placed that debt

with Defendant Hunter Warfield, Inc. (HW), a Maryland corporation registered in

Ohio that holds itself out as a nationwide, fully compliant, licensed debt collector. (Id.

at #643, 656).

On April 3, 2025, HW called Milligan and demanded payment of $939.99. (Id.

at #656). During the call, Milligan disputed the debt and informed HW that she had

obtained counsel, providing HW with her attorney’s contact information. (Id.). The

next day, and after Plaintiffs raised the PAF charge’s inclusion with Defendants,

Milligan received a “Revised Move-Out Statement” that zeroed out the PAF charge.

(Id. at #648, 656). Milligan contends she in fact owes VineBrook nothing and that

VineBrook has wrongfully withheld her $1,125.00 security deposit. (Id. at #656).

In sum, Plaintiffs allege that thousands of Ohio tenants executing both Pre-

and Post-August 2024 VBHLAs have paid VineBrook PAFs, Set Up Fees, and

Monthly Service Fees all in violation of Ohio law. (Id. at #650–51). Plaintiffs also

argue that two of the VineBrook Defendants, VHOP and VHLLC, fraudulently

represented not only to those Ohio tenants, but also to thousands of tenants in other

states, that the PAF would be assessed to help pay for maintenance, repairs, and

damages to the rented property, when in fact, as described above, that was not so.

(Id. at #661–63).

Based on all that, Plaintiffs bring this putative class action on behalf of

themselves and eight proposed classes of similarly situated individuals. (Id. at #657–

61). Plaintiffs organize the proposed classes by lease type (Pre-August 2024 and Post-

August 2024), geography (nationwide and Ohio-only), and the specific fee at issue

(PAF, attorney’s fees, Conservice set-up fees, and Conservice monthly service fees);

the complaint also proposes a separate class for individuals who received a debt-

collection call from HW without a subsequent validation notice. (Id.).

In total, Plaintiffs bring seven “Class and Individual” counts covering those

eight proposed classes, six of which are against the VineBrook Defendants and one of

which is against HW. (Id. at #661–76). The six VineBrook claims are: (1) civil RICO

under 18 U.S.C. § 1962(c), against VHOP and VHLLC; (2) breach of contract;

(3) unjust enrichment; (4) disgorgement under Ohio’s Landlord-Tenant Act, R.C.

§ 5321.14(A); (5) conversion; and (6) declaratory and injunctive relief. (Id. at #662–

74). Against HW, who is not a party to this motion, Plaintiffs assert a claim for

violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (Id. at

#674–75). Beyond the proposed class claims, each Plaintiff also asserts an individual

breach of contract claim against the VineBrook Defendants based on VineBrook’s

alleged failure to maintain their residences, and Milligan separately asserts an

individual claim for wrongful withholding of her security deposit under Ohio Revised

Code § 5321.16. (Id. at #685–88.)

VineBrook moves to dismiss the Second Amended Complaint in its entirety

under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Doc. 28). VineBrook

alternatively moves to dismiss Defendants VHTI and VHOP for lack of personal

jurisdiction under Rule 12(b)(2). (Doc. 28). That motion is now fully briefed. (Docs. 34,

37). The Court addresses each argument in turn.

LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must allege “sufficient

factual matter … to state a claim to relief that is plausible on its face.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009) (cleaned up). While a “plausible” claim for relief does

not require a showing of probable liability, it requires “more than a sheer possibility

that a defendant has acted unlawfully.” Id. The complaint must allege sufficient facts

to allow the Court “to draw the reasonable inference that the defendant is liable.” Id.

“In reviewing a motion to dismiss, [the Court] construe[s] the complaint in the

light most favorable to the plaintiff, draw[s] all reasonable inferences in their favor,

and accept[s] all well-pleaded allegations in the complaint as true.” Keene Grp. Inc.

v. City of Cincinnati, 998 F.3d 306, 310 (6th Cir. 2021). But that does not mean the

Court must take everything a plaintiff alleges at face value, no matter how

unsupported. The Court may disregard “naked assertions” of fact, “formulaic

recitations of the elements of a cause of action,” and “mere conclusory statements.”

Iqbal, 556 U.S. at 678 (cleaned up). Additionally, the Court may grant a motion to

dismiss “on the basis of a dispositive issue of law.” Neitzke v. Williams, 490 U.S. 319,

326 (1989) (citations omitted).

As noted above, Defendants also move to dismiss certain claims for lack of

jurisdiction under Rule 12(b)(1). When a defendant challenges the Court’s jurisdiction

under Rule 12(b)(1), “the plaintiff has the burden of proving jurisdiction in order to

survive the motion.” Rogers v. Stratton Indus., Inc., 798 F.2d 913, 915 (6th Cir. 1986);

Courtney v. Smith, 297 F.3d 455, 459 (6th Cir. 2002) (“[T]he plaintiff, as the party

invoking federal subject matter jurisdiction, has the burden of persuading the court

that all of the requirements necessary to establish standing to bring the lawsuit have

been met.”).

While the Court does not reach Defendants’ personal jurisdiction arguments,

it does reach standing arguments directed at two of the claims. “Standing arises from

the Constitution’s mandate that federal courts decide only ‘Cases’ or ‘Controversies.’”

Oklahoma v. United States, 62 F.4th 221, 233 (6th Cir. 2023) (quoting U.S. Const.

art. III, § 2, cl. 1). Standing is therefore a matter of the court’s subject matter

jurisdiction. Loren v. Blue Cross & Blue Shield of Mich., 505 F.3d 598, 607 (6th Cir.

2007). To establish standing to sue, a plaintiff “must point to an injury that is

traceable to the defendant’s conduct and that a judicial decision can redress.”

Oklahoma, 62 F.4th at 233 (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61

(1992)). Any injury-in-fact a plaintiff alleges must constitute “an invasion of a legally

protected interest that is concrete and particularized and actual or imminent, not

conjectural or hypothetical.” Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016) (cleaned

up).

LAW AND ANALYSIS

The VineBrook Defendants move to dismiss all of Plaintiffs’ claims against

them. While Defendants mostly argue pleading defects under Rule 12(b)(6), they also

argue under Rule 12(b)(1) that Plaintiffs lack standing as to some of the claims and

separately that the Court lacks personal jurisdiction over at least some of the

VineBrook Defendants. Typically, of course, the Court would start with jurisdiction,

and particularly subject matter jurisdiction, as that goes to the Court’s power to act.

Here, though, VineBrook directs its jurisdictional arguments only at some of the

claims and some of the defendants. In short, they do not dispute that the Court has

the power to hear the case, but rather, only whether the Court has the power to hear

some of the claims and authority over some of the parties. Accordingly, the Court will

move through the claims seriatim, noting those as to which subject-matter

jurisdiction concerns arise. And, separately, because the Court dismisses (for failure

to state a claim) those claims that are directed (in part) against the defendants raising

personal jurisdiction arguments, the Court declines to reach those jurisdictional

arguments.

A. The Court Dismisses Plaintiffs’ RICO Claims Because They Do Not

Sufficiently Plead Predicate Acts.

Plaintiffs assert a RICO claim against two of the Defendants, VHOP and

VHLLC, on behalf of each named Plaintiff and the potential class. (Doc. 24, #661).

The two companies are related. VHOP is a Delaware limited partnership that

“[c]onducts all the business of VHTI” (the parent organization) and “own[s] all the

SFR properties” at issue in this case. (Id. at #639). VHLLC, on the other hand, is an

Ohio LLC that VHOP owns. It acts as the “SFR property management arm of VHTI

and VHOP.” (Id. at #639–40). Plaintiffs allege that these two “separate legal entities”

conducted the “VineBrook Enterprise’s affairs through a pattern of racketeering

activity and for the unlawful purpose of defrauding Plaintiffs,” in violation of 18

U.S.C. § 1962(c). (Id. at #661).

To move past the pleading stage on such a claim, Plaintiffs must plausibly

allege that VHOP and VHLLC (1) conducted, (2) an enterprise, (3) through a pattern

of, (4) racketeering activity. In re ClassicStar Mare Lease Litig., 727 F.3d 473, 483

(6th Cir. 2013). And because Plaintiffs base their RICO claim on the predicate

offenses of wire and mail fraud, Federal Rule of Civil Procedure 9(b) applies to prongs

three and four. Accordingly, they must “state with particularity the circumstances

constituting fraud.” Wall v. Michigan Rental, 852 F.3d 492, 495 (6th Cir. 2017)

(applying Rule 9(b)’s heightened pleading requirement to civil RICO claims premised

on wire, mail, and bank fraud). The Court finds that while Plaintiffs plausibly allege

the first two elements, they fail to clear the hurdle as to the elements that rest on

fraud.

“[C]onduct[ing]” the affairs of a RICO enterprise means to “lead, run, manage,

or direct” those affairs. Reves v. Ernst & Young, 507 U.S. 170, 177 (1993). “[S]ome

part in directing the enterprise’s affairs is required.” Id. at 179 (emphasis in original).

RICO defendants direct the enterprise’s affairs “either by making decisions on behalf

of the enterprise or by knowingly carrying them out.” Ouwinga v. Benistar 419 Plan

Servs., Inc., 694 F.3d 783, 792 (6th Cir. 2012) (quoting United States v. Fowler, 535

F.3d 408, 418 (6th Cir. 2008) (emphasis removed)). On that front, Plaintiffs allege

that VHOP and VHLLC conducted some aspects of the enterprise—i.e., they were the

ones collecting monthly PAFs from tenants, recovering unpaid PAFs from tenants’

security deposits, and diverting that money for other purposes, including the

purchase of insurance policies—all while knowing that the “PAF provision serve[d]

as a false pretext.” (Doc. 24, #652, 662). So, while Plaintiffs do not allege who the

enterprise’s decisionmakers are, they do successfully allege that VHOP and VHLLC

at the very least knowingly advanced the enterprise’s efforts. That suffices as to the

first element for pleading purposes.

Second, Plaintiffs must allege the existence of a qualified enterprise that is

distinct from the “‘persons’ who conduct the affairs of th[at] enterprise through a

pattern of racketeering activity.” In re ClassicStar Mare, 727 F.3d at 490 (citation

omitted). While this element is a bit of a closer call, ultimately, the Court finds it met

as well. Under the statute, an “‘enterprise’ includes any individual, partnership,

corporation, association, or other legal entity, and any union or group of individuals

associated in fact although not a legal entity.” 18 U.S.C. § 1961(4). Plaintiffs allege

that the VineBrook Defendants “constitute an association-in-fact of distinct legal

entities outwardly conducting a legitimate real estate business” while having the

fraudulent “ulterior financial purpose” of collecting PAFs. (Doc. 24, #651–52).

“[A]n association-in-fact enterprise must have at least three structural

features: a purpose, relationships among those associated with the enterprise, and

longevity sufficient to permit these associates to pursue the enterprise’s purpose.”

Boyle v. United States, 556 U.S. 938, 946 (2009). Plaintiffs’ allegations clear this bar.

The various VineBrook entities share the common purpose of running a real estate

business operation and are closely interconnected—in fact, most of the entities are

owned by VHOP, which is in turn partnered with VHTI. (Doc. 24, #638–43). In their

reply brief, Defendants seem to argue that the enterprise members must share a

criminal purpose, and they claim that Plaintiffs’ “concession” that VineBrook has a

“largely legitimate” purpose is fatal to the claim. (Doc. 37, #1193). That misstates the

law. While Plaintiffs must of course sufficiently plead predicate (criminal) acts to

plausibly allege their RICO claim, the term “enterprise” as used by the statute

“include[s] both legitimate and illegitimate enterprises within its scope.” United

States v. Turkette, 452 U.S. 576, 580 (1981).

True, this is not the end of the inquiry. The corporate defendants allegedly

doing the racketeering (VHOP and VHLLC) must also be distinct from the enterprise.

In re ClassicStar Mare, 727 F.3d at 490 (citing Cedric Kushner Promotions, Ltd. v.

King, 533 U.S. 158, 161 (2001)). But when the alleged enterprise is made up of related

corporate identities, distinctness is not a straightforward question. Indeed, “courts

disagree over when and whether a corporate parent” can be distinct for RICO

purposes. Id. That makes sense, it is hard to picture a parent company as distinct in

any relevant sense from the network of entities it presumably controls. Id. at 493

(“Typically, a parent corporation and its subsidiaries do not satisfy the distinctness

requirement because they cannot form an enterprise distinct from the parent.”). On

the other hand, perhaps that concern is reduced a bit here where VHOP and VHLLC

are both subsidiaries, not the parent company.4

Despite the “meandering and inconsistent case law” in this area, the Sixth

Circuit has managed to distill a principle that proves helpful here—“corporate

defendants are distinct from RICO enterprises when they are functionally separate,

as when they perform different roles within the enterprise or use their separate legal

incorporation to facilitate racketeering activity.” Id. at 492. True, the latter part of

that doesn’t really move the needle. On the facts alleged here, it is not clear how

VHOP and VHLLC specifically use their status as separate legal entities to

“facilitate” the alleged fraud. That said, the other category is a better fit for Plaintiffs’

allegations—each subsidiary is alleged to have a distinct role. According to Plaintiffs,

VHOP’s distinct role is conducting VHTI’s business along with ownership of all the

SFR properties (through ownership of the various subsidiaries that hold the deeds),

4 While the complaint is not altogether detailed in describing the corporate structure, it

appears that VHTI sits at the top. (Doc. 24, #638–39).

and that VHLLC’s distinct role is as the “property management arm of VHTI and

VHOP” that executed the leases with the tenants. (Doc. 24, #639–40). And those

distinct roles arguably “facilitated” the scheme in the sense that their roles were

necessary to the alleged fraud—some entity needed to hold title, and some entity

needed to execute the leases and collect the PAF. Under Sixth Circuit case law, that

appears to be enough to establish distinctness, at least for pleading purposes, which

is all that matters here. See Compound Prop. Mgmt., LLC v. Build Realty, Inc., 462

F. Supp. 3d 839, 860 (S.D. Ohio 2020) (discussing In re ClassicStar Mare, 727 F.3d at

493 and finding allegations of different roles sufficient for distinctness).

But that is the end of the line. Despite plausibly alleging the first two elements,

Plaintiffs’ RICO claim fails on the last two because they do not plausibly allege a

pattern of racketeering. In re ClassicStar, 727 F.3d at 484 (“To establish a substantive

RICO violation, a plaintiff must show ‘a pattern of racketeering activity.’” (quoting

Ouwinga, 694 F.3d at 795)). Mail fraud and wire fraud, which are what Plaintiffs

allege here, “are among the enumerated predicate offenses that can constitute

‘racketeering activity.’” Id. (citing 18 U.S.C. § 1961(1)). So that seems like a promising

start. But Plaintiffs must plausibly allege that the RICO Defendants committed a

“continuous” series of “related” predicate frauds. H.J. Inc. v. Northwestern Bell

Telephone Co., 492 U.S. 229, 239–43 (1989) (explaining RICO’s pattern requirement).

Plaintiffs do not allege any.

Mail fraud requires proof of “(1) a scheme to defraud, and (2) use of the mail

in furtherance of the scheme.” United States v. Jamieson, 427 F.3d 394, 402 (6th Cir.

2005). The elements of wire fraud “are essentially the same except that one must use

the wires in furtherance of the scheme to defraud,” rather than the mail. Heinrich v.

Waiting Angels Adoption Servs., Inc., 668 F.3d 393, 404 (6th Cir. 2012). That “scheme

to defraud” is “any plan or course of action by which someone intends to deprive

another of money or property by means of false or fraudulent pretenses,

representations, or promises.” ClassicStar, 727 F.3d at 485 (quoting United States v.

Faulkenberry, 614 F.3d 573, 581 (6th Cir. 2010)). “[A] plaintiff must also demonstrate

scienter.” Id. (citation omitted).

And one more thing bears mention, because the predicate offenses sound in

fraud, Rule 9(b) applies, meaning Plaintiffs must “state with particularity the

circumstances constituting fraud.” Wall, 852 F.3d at 495 (6th Cir. 2017); Bender v.

Southland Corp., 749 F.2d 1205, 1216 (6th Cir. 1984) (affirming dismissal of RICO

mail fraud claim because complaint did not satisfy Rule 9(b)’s particularity

requirement). “Under this rule, a plaintiff must specify (1) what the fraudulent

statements were, (2) who made them, (3) when and where the statements were made,

and (4) why the statements were fraudulent.” Morris Aviation, LLC v. Diamond

Aircraft Indus., Inc., 536 F. App’x 558, 562 (6th Cir. 2013) (citing Republic Bank &

Trust Co. v. Bear Stearns & Co., 683 F.3d 239, 247 (6th Cir.2012)). The first three are

perhaps not all that problematic here, as Plaintiffs point to the particular provisions

in the VineBrook leases that they believe constitute fraud. (See, e.g., Doc. 24, #652

(quoting the Pre-August 2024 VBHLAs’ PAF Provision)). But they fail on the last

point, plausibly alleging why those statements were fraudulent.

Plaintiffs’ claimed fraud is that VHOP and VHLLC falsely represented to their

tenants that VineBrook would use the PAF for maintenance when, in fact, they used

those funds for other purposes. (Doc. 24, #652). Specifically, Plaintiffs contend that

the RICO Defendants instead used the funds to purchase insurance policies to protect

their own interests in the various properties. (Id.).

That alone is not enough for the Court to infer that the statements are in fact

fraudulent. Remember, in those leases where it appears, the PAF provision states

that the fee is “assessed to help Lessor pay for the costs associated with maintenance,

repairs, and damages to the property.” (Doc. 24, #644 (emphasis added)). But all

Plaintiffs allege about the insurance are vague statements that the purchased

policies “cover VineBrook Defendants’ interests in the SFRs,” that Defendants

“receive certain financial incentives,” that the insurance only financially benefits

Defendants, and that the purchases unknowingly exposed Plaintiffs to “subrogation”

by the insurance carriers. (Doc. 24, #653–54). Such general statements could apply to

many sorts of insurance policies, including, for example, insurance that covers

tenant-caused property damage. And in the Court’s view, such insurance would

certainly help Defendants pay for the “costs associated with maintenance, repairs,

and damages to the property,” just as the PAF provision says.

Admittedly, there are other kinds of insurance policies—e.g., injury-liability

insurance, or loss of rental income insurance. And those policies might be

unconnected to any actual upkeep costs. But Plaintiffs do not allege sufficient facts

for the Court to infer that the PAF is (or is not) being used by Defendants to purchase

those types of insurance, especially considering Rule 9(b)’s particularity requirement.

So, because the complaint lacks any specific allegations of Defendants using

the funds out of step with the PAF provision, it would seem Plaintiffs’ fraud theory

requires the Court to read the leases as representing that the PAF would be

segregated from other rent and used exclusively for direct maintenance costs—i.e., to

pay repair people or buy replacement parts—but those are words the lease simply

does not contain.

Because Plaintiffs identify no false representation in the lease itself, the mail

and wire fraud theory fails. And because there are no predicate acts plausibly pled,

the Court dismisses the entire RICO claim.

B. The Court Dismisses Plaintiffs’ Class and Individual Breach of

Contract Claims Because They Do Not Plausibly Plead a Breach.

Plaintiffs bring a breach of contract claim on behalf of each Plaintiff

individually, and on behalf of a potential class, against all VineBrook Defendants for

breaching “their contractual duty of good faith and fair dealing.” (Doc. 24, #665).

Plaintiffs allege Defendants did so by including the PAF provision and the attorney’s

fee provision in the Pre-August 2024 VBHLAs, and by the charging of tenants “Set

Up Fees” and “Monthly Service Fees” under the Post-August 2024 VBHLAs. (Id. at

#663–65).

These claims have a problem right out of the gate. Under Ohio law, “there is

no independent cause of action for breach of the implied duty of good faith and fair

dealing apart from a breach of the underlying contract.” Lucarell v. Nationwide Mut.

Ins., 97 N.E.3d 458, 469 (Ohio 2018). For Plaintiffs to plead a breach of contract claim,

they must “identify[] and present[] the actual terms of the contract allegedly

breached.” Northampton Rest. Grp., Inc. v. FirstMerit Bank, N.A., 492 F. App’x 518,

522 (6th Cir. 2012) (quoting Harris v. Am. Postal Workers Union, 198 F.3d 245, 1999

WL 993882, at *4–5, (6th Cir. Oct. 19, 1999) (per curiam) (table)) (applying Ohio law).

While Plaintiffs point to contract provisions that they believe violate Ohio public

policy, they do not point to any provision that the VineBrook Defendants allegedly

breached. (Doc. 24, #664). In fact, in the section of their response brief addressing this

point, all Plaintiffs state is that “Defendants breached the implied covenant of good

faith and fair dealing inherent in every Ohio contract by imposing the PAF and Lessor

Recourse Term” in violation of “Ohio’s Landlord Tenant Act and public policy.” (Doc.

34, #1014). But that does not allege a breach of a contract term.5 As Plaintiffs have

not alleged a breach, the Court dismisses this claim.

C. The Court Dismisses Plaintiffs’ Class and Individual Unjust

Enrichment Claims Because the Fees Are Governed by a Lawful

Contract.

Plaintiffs plead class-wide and individual unjust enrichment6 claims in the

alternative to their breach of contract claims. (Doc. 24, #666–67). Specifically, they

5 While Plaintiffs elsewhere allege that the VineBrook Defendants used the PAF funds for

purposes not named in the lease, nowhere do they claim that to be a breach of the contract.

6 Plaintiffs call this claim for relief “Unjust Enrichment/Quantum Meruit.” (Doc. 24, #666).

However, in Ohio, while “the elements of quantum meruit and unjust enrichment have been

found to be identical,” they are distinct claims. A N Bros. Corp. v. Total Quality Logistics,

L.L.C., 59 N.E.3d 758, 770 (12th Dist. 2016). “The difference is the manner in which damages

are computed.” Id. In unjust enrichment actions, damages are based on the benefit to the

defendant, while in quantum meruit actions, damages are based on the value of the plaintiff’s

claim that “VineBrook Defendants would be unjustly enriched if VineBrook

Defendants are permitted to retain the benefits of charging and/or collecting the

PAFs, legal fees, Set Up Fees and/or Monthly Service Fees.” (Id. at #667).

“To establish unjust enrichment, a plaintiff must show that (1) a benefit was

conferred by the plaintiff upon the defendant; (2) the defendant had knowledge of the

benefit; and (3) the benefit was retained by the defendant in circumstances where it

would be unjust to do so without payment.” Vandemark v. Reder, 276 N.E.3d 451, 467

(1st Dist. 2026) (quoting Helton v. Fifth Third Bank, 2022-Ohio-1023, ¶ 25, (1st Dist.

Mar. 30, 2022)).

However, under Ohio law, “[t]he doctrine of unjust enrichment cannot apply

when an express contract exists.” Bickham v. Standley, 917 N.E.2d 330, 335 (3rd Dist.

2009); Bihn v. Fifth Third Mortg. Co., 980 F. Supp. 2d 892, 904 (S.D. Ohio 2013)

(“Under Ohio law, a plaintiff may not recover under the theory of unjust enrichment

when an express contract covers the same subject.”). The payments which Plaintiffs

claim unjustly enriched VineBrook (at least those that were paid at all) were made

pursuant to the leases, or in other words, contracts. So, this claim turns on whether

any of the fee provisions are “illegal and unenforceable under Ohio law,” meaning

there would be no valid contract governing the fees in question.7 (Doc. 34, #1016);

services. Id. (quotation omitted). Here, because no damages are being awarded on this claim,

the Court does not need to guess which of the two the Plaintiffs seek.

7 In the complaint, Plaintiffs concentrate their enforceability arguments under their

“Disgorgement Pursuant to R.C. § 5321.14(A)” claim, not unjust enrichment. (See Doc. 24,

#666–69). But as discussed below, “disgorgement” is not a cause of action under Ohio Revised

Code § 5321.14(A). That section instead allows a Court to “refuse to enforce” an

unconscionable rental agreement clause, meaning the statute is defensive in nature. So the

Vandemark, 276 N.E.3d at 468 (“[E]quity permits claims for unjust enrichment,

notwithstanding the existence of a contract, where there is ‘evidence of fraud,

illegality, or bad faith.’” (quoting Weiper v. W.A. Hill & Assocs., 661 N.E.2d 796, 804

(1st Dist. 1995))). Because the Court ultimately finds that the PAF and utility fee

provisions are enforceable, and no plaintiff has standing to challenge the attorney’s

fees provision, the claim for unjust enrichment fails.

The Court starts with the PAF provision of the Pre-August VBHLAs. Plaintiffs

allege that clause is “inherently unconscionable” because Ohio Revised Code

§ 5321.13(D) prohibits it—“in that [the term] expects to partially limit Defendants’

statutory liabilities” by shifting maintenance costs to tenants. (Doc. 24, #668).

As far as the Court can tell, the basic argument goes like this. Ohio Revised

Code § 5321.04(A) obliges the landlord to provide all necessary repairs to “keep the

premises in a fit and habitable condition.” And then § 5321.13(D) separately goes on

to state that “[n]o agreement by a tenant to the exculpation or limitation of any

liability of the landlord arising under law or to indemnify the landlord for that

liability or its related costs shall be recognized in any rental agreement or in any

other agreement between a landlord and tenant.” Plaintiffs claim that the PAF here

does just that; it limits Defendants’ statutory liabilities outlined in § 5321.04(A) by

Court finds that unjust enrichment, an affirmative remedy, is the proper vehicle for any

potentially meritorious claims based on the collection of unconscionable fee provisions.

Indeed, the third element of unjust enrichment itself, the “unjust” part, is quite similar to

unconscionability.

requiring tenants essentially to indemnify in advance, through the PAF, the

landlord’s maintenance and other costs. (Doc. 24, #668). The Court disagrees.

Begin with the text of § 5321.13(D). The Court sees no evidence that the PAF

provision is an agreement to remove or limit “liability” as that section discusses. Even

assuming the fee shifts some of the costs of maintenance and repairs onto tenants,8

maintenance is a duty, not a “liability.” And there is nothing in the PAF provision

that limits tenants from say, suing over inadequate conditions. Nor is there anything

that requires tenants to indemnify VineBrook for any liability that VineBrook might

incur—such as liability because of a personal injury on the premises. Simply put, this

is not an arrangement through which the tenants waive or assume any of VineBrook’s

“liabilities.” Indeed, the one case Plaintiffs cite in support concerned a provision that

explicitly had such an arrangement. See Grandsko v. Andover Toledo, LLC, No. CI-

2019-2456, 2021 Ohio Misc. LEXIS 2149, at *8 (Lucas Cty. Ct. Com. Pl. Jan. 29, 2021)

(discussing a lease provision stating that “Tenant agrees to protect, indemnify and

save harmless the Landlord from all losses, costs or damages [related to

injuries] … [i]n addition, the Tenant hereby waives all rights of recovery against the

Landlord [for reimbursement by insurance]”). The Court thus dismisses the unjust

enrichment claim based on the collected property administration fees.

8 This argument also seems a bit in contradiction with Plaintiffs’ RICO argument. There they

argue that the PAF provision is fraudulent because those fees are not actually used for

maintenance and repair costs, and here they argue that the provision is unlawful because

VineBrook cannot collect a fee that is used for maintenance and repair costs.

The Court next addresses the attorney’s fees provision of the Pre-August 2024

VBHLAs. Plaintiffs claim that such a provision is “clearly prohibited by R.C.

§ 5321.13(C).” (Doc. 24, #668). Plaintiffs have a point, that statute reads: “[n]o

agreement to pay the landlord’s or tenant’s attorney’s fees shall be recognized in any

rental agreement for residential premises or in any other agreement between a

landlord and tenant.” Ohio Rev. Code § 5321.13(C). And the offending lease provision

in question requires an evicted tenant to pay “[a]ll costs,” including any “legal fees or

attorney fees.” (Doc. 24, #646). So, it may very well be true that this particular term

is unenforceable in Ohio.

But Plaintiffs have a separate problem. To proceed in an Article III court,

Plaintiffs must demonstrate standing. Loren, 505 F.3d at 607 (6th Cir. 2007). That

is, they must show that they have suffered a concrete injury redressable by a decision

in their favor. Id. (citing Cleveland Branch NAACP v. City of Parma, 263 F.3d 513,

523–24 (6th Cir. 2001)). And “standing is not dispensed in gross.” DaimlerChrysler

Corp. v. Cuno, 547 U.S. 332, 353 (2006) (quotation omitted). So they must show

standing as to each claim they intend to pursue. Id. at 351–53. Here, though, they do

not allege that Defendants enforced the attorney’s fee term against any of them.

Indeed, so far as the Court can tell, VineBrook never evicted any named plaintiff, so

Defendants could not have enforced the provision against them. Nor can Plaintiffs

point to any imminent future harm, as none of them possess an active lease. So, as

Plaintiffs lack standing to assert a claim based on that provision, the Court dismisses

this portion of the claim as well.

Finally, Plaintiffs claim that the UARA—which includes the provisions for Set

Up Fees and Monthly Service Fees—incorporated in the Post-August 2024 VBHLAs

is inherently unconscionable because it is “clearly prohibited by R.C. § 5321.13(D).”

(Doc. 24, #668). As quoted above, that provision prohibits agreements through which

tenants are to indemnify or limit the liability of the landlord at the tenants’ expense.

Ohio Rev. Code § 5321.13(D).

But, much as with the alleged fraud-based claims, the complaint is light on

allegations as to why the UARA provisions supposedly violate that statutory

command. Remember, Plaintiffs allege that VineBrook engages a third-party billing

agent, Conservice, to administer and bill tenants for utility services such as water,

sewer, stormwater, trash, gas or electricity. (Doc. 24, #649). When tenants sign up,

Conservice charges them a $30 set-up fee and additional monthly $10 service fees.

(Id. at #650). Assuming that Plaintiffs rely on the same argument as for the PAF

provision—that tenants paying a fee to cover a duty of the landlord violates the

statute—it fails for the same reason. Charging tenants utility-related fees is a far cry

from forcing tenants to assume liability or indemnify VineBrook.

However, Plaintiffs’ response clarifies (or modifies) their legal theory a bit.

They argue that it is unlawful for a landlord to charge for access to utilities, when the

provision of such utilities is a duty that Ohio Revised Code § 5321.04(B) imposes on

landlords. (Doc. 34, #1025). They contend that charging for that statutorily mandated

access is what is unlawful. (Id. at #1025–26 (citing Jenkins v. Roger C. Perry & Co.,

614 N.E.2d 850, 851–52 (10th Dist. 1992))). But this argument also fails for a simple

reason. Conservice, who is a third party, is the one charging and ultimately collecting

the fees. They are not alleged to flow to VineBrook. These fees instead are simply the

cost of the tenants procuring utilities, and no Ohio statute requires VineBrook to

cover set up or monthly utility costs—that falls on the individual tenant. In sum,

because Plaintiffs fail to allege that Defendants unjustly collected any of these three

fees, the Court dismisses this claim.

D. The Court Dismisses Plaintiffs’ Class and Individual Disgorgement

Claims Because They Fail to State a Claim and It Is Not the Proper

Remedy.

Plaintiffs caption their fourth count “Disgorgement Pursuant to R.C.

§ 5321.14(A).” (Doc. 24, #667–69). As discussed in connection with the previous claim,

they contend that the PAF provision, the Lessor Recourse attorney’s fees provision,

and the UARA’s Set Up and Monthly Service Fees are “inherently unconscionable”

because Ohio law flatly prohibits them. As already discussed, the Court disagrees as

to the PAF provision and the utility fees, and Plaintiffs do not have standing to

challenge the attorney’s fees provision.

In any event, this claim also has another problem. “Disgorgement” is not a

standalone claim; it is a remedy. Further, it is not a remedy available under Ohio

Revised Code § 5321.14(A), the statute on which Plaintiffs rely. That section, which

deals with unconscionable leases, states that a court “may refuse to enforce the rental

agreement” entirely, or “may enforce the remainder of the rental agreement without

the unconscionable clause,” or it may “limit the application of the unconscionable

clause.” Disgorgement, the return of funds, is none of those three. As discussed above,

such a remedy properly belongs under Plaintiffs’ unjust enrichment claim.

E. The Court Dismisses Plaintiffs’ Class and Individual Conversion

Claims Because VineBrook Did Not Wrongfully Dispossess Plaintiffs.

Plaintiffs also bring conversion claims on behalf of Florence, Jones, and all

other similarly situated individuals who paid PAFs to VineBrook. (Doc. 24, #669–72).

Under Ohio law, conversion requires “a wrongful act or disposition of plaintiff’s

property rights.” 6750 BMS, L.L.C. v. Drentlau, 62 N.E.3d 928, 934 (8th Dist. 2016).

Simply put, on the facts alleged, VineBrook did not wrongfully dispossess Plaintiffs

by charging and collecting the PAFs from them. Plaintiffs agreed to pay that money

as part of an express contract.

True, Plaintiffs argue elsewhere (and in response to VineBrook’s motion to

dismiss this claim) that Defendants fraudulently induced that contract, and that the

terms are unlawful. But inasmuch as that is Plaintiffs’ argument for conversion, it is

duplicative of the RICO and unjust enrichment claims (which the Court has already

dismissed). So, the Court dismisses the conversion claim as well.

F. The Court Dismisses Plaintiffs’ Claims for Injunctive and Declaratory

Relief for Multiple Reasons.

Plaintiffs, individually and on behalf of the class, also seek the Court’s

declaration that the inclusion of the three contested fee provisions in their leases, as

well as the collection of those fees, was unlawful. (Doc. 24, #672–74). The Court denies

that request, because as the Court held above, the Plaintiffs have not plausibly

pleaded that the PAF and utility provisions are unlawful, and the Plaintiffs lack

standing to challenge the attorney’s fees provision. Further, this request is

“redundant with the relief already sought.” Jerome-Duncan, Inc. v. Auto-By-Tel, LLC,

176 F.3d 904, 908 (6th Cir. 1999); see also Moser v. Menard, Inc., No. 1:20-cv-796,

2023 WL 5979263, at *3 (S.D. Ohio Sept. 13, 2023) (dismissing duplicative

declaratory judgment claim “because the Court’s adjudication of its breach of contract

claim necessarily will answer the questions on which it seeks declaratory relief”).

Plaintiffs’ requests for injunctive relief, both those to prevent the provisions’

inclusion in future leases and those to prevent collection, fail on the merits for the

same reasons. Further, the requests fail because Plaintiffs’ leases have terminated,

so Plaintiffs do not demonstrate the necessary showing of “actual and imminent

harm” to them. Abney v. Amgen, Inc., 443 F.3d 540, 552 (6th Cir. 2006).

G. The Court Dismisses Each Individual Breach of Contract Claim for

Failing to Plead Sufficient Facts.

Each Plaintiff asserts an individual breach of contract claim premised on

VineBrook’s alleged failure to make repairs and maintain their residences in a fit and

habitable condition. (Doc. 24, #685–87). In support, Plaintiffs allege, identically as to

each of them, that they “contacted VineBrook Defendants requesting them to make

various reasonable repairs and calls for maintenance” and that VineBrook “failed to

make such repairs and failed to maintain the SFR in a fit and habitable condition as

required by Ohio law.” (Id.).

That fails to state a claim. These are precisely the types of “labels and

conclusions” that Iqbal forbids. 556 U.S. at 678. A plaintiff must plead “sufficient

factual matter” from which the Court can “draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Id. Here, the complaint alleges

nothing about what specific repairs were needed, when they were requested, the

nature of the habitability deficiencies, or how VineBrook responded. Without these

facts, neither the Court nor VineBrook can assess the actual basis for the claims, nor

reasonably infer that Defendants acted wrongly. See Bell Atlantic Corp. v. Twombly,

550 U.S. 544, 555 (2007).

H. The Court Dismisses Milligan’s Claim Based on the Withholding of Her

Security Deposit Because She Alleges No Damages.

Milligan asserts a claim based on the wrongful withholding of her security

deposit in violation of Ohio Revised Code § 5321.16. (Doc. 24, #687–88). Upon

commencement of her one-year lease, she paid a $1,125.00 security deposit. (Id. at

#687). However, due to concerns regarding the habitability of the property, she

terminated that lease after only three months. (Id. at #687). Those concerns included

“misrepresentations about appliances, mold growth and insect infestation, all of

which went without timely or appropriate remediation by VineBrook.” (Id.). And

Milligan says that when she departed, VineBrook withheld her security deposit in

violation of § 5321.16. (Id.).

Under § 5321.16(B), a landlord must return a tenant’s security deposit within

thirty days or provide a statement itemizing any security deposit deductions. A

tenant may recover damages under § 5321.16(C) if the landlord fails to comply with

§ 5321.16(B), including by wrongfully withholding money from the security deposit.

Milligan claims that VineBrook did in fact provide a written summary of

charges they made and set off against her deposit, but that those charges were

unlawful. (Doc. 24, #687). The only specific charge she names in the complaint,

however, is the PAF. (Id.). That is a bit of a mystery, though, because Milligan signed

a post-August 2024 VBHLA, which did not contain a PAF provision. (Id. at #649). The

move out statement, which she attached to the complaint, (Id. at #768–69), clears

things up some. It shows that, while VineBrook initially charged her a PAF, it

removed the charge before Milligan paid anything. So Milligan has no damages

arising from the PAF-based wrongful-withholding claim she pleaded. Meaning, she

lacks standing for the Court to adjudicate her claim. And aside from her conclusory

allegation that Defendants violated the statute, Milligan makes no other allegations

under this claim. So the Court dismisses this count as well.

* * *

In sum, all claims against the VineBrook Defendants fail. So the Court

dismisses all defendants except HW from this case. But because this is a first

dismissal, and because it is possible that Plaintiffs could address at least some of the

identified pleading deficiencies through further allegations, the Court dismisses the

claims without prejudice.

CONCLUSION

For the reasons discussed above, the Court GRANTS Defendants’ Motion to

Dismiss (Doc. 28). As a result, the Court DISMISSES all counts except Count 6, the

FDCPA claim against HW, WITHOUT PREJUDICE. The Court DIRECTS the

Clerk to TERMINATE all Defendants, except Hunter Warfield, Inc., from the Court’s

docket.

SO ORDERED.

August 13, 2026

DATE DOUGLAS R. COLE

UNITED STATES DISTRICT JUDGE

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