IN THE CIRCUIT COURT OF THE FIFTEENTH JUDICIAL CIRCUIT, IN AND FOR PALM BEACH COUNTY, FLORIDA.
CASE NO.502006CA 002080xxxxMB AH Samantha S. Moss as Class Representative of those similarly situated; Plaintiff, vs. Olen Properties Corporation a Florida corporation and Olen Residential Realty Corporation a foreign corporation all licensed to do business in Florida Defendants. __________________________________/
Class Representation Class Action Amended Complaint
GENERAL AVERMENTS
1. Olen Properties Corporation a Florida corporation and Olen Residential Realty Corporation a foreign corporation are both licensed to do business in Florida ( hereinafter “OLEN”) and were, at all times material hereto, doing business in Palm Beach County. OLEN is engaged in the trade and commerce of acquiring, managing
and renting residential apartments throughout the State of Florida for personal and family residential housing. OLEN owns, controls, manages and/or operates
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approximately 11 apartment rental complexes in the State of Florida composed of approximately 3,300 rental apartment units. OLEN actively promotes its rental housing through its web site at www.olenproperties.com. See attached Exhibit “A”. This web site is designed to facilitate and promote the rental of its apartments throughout the State of Florida. The web site includes a listing of Florida apartment complexes making them available for rental with further information on their managing agents located at each of it’s 11 complexes in the State of Florida, of which half are in Palm Beach County. OLEN attempts to unlawfully collect certain debts, as alleged herein, from former tenants who reside in Palm Beach County. "Landlord". 2. Plaintiff, Samantha Moss, is a former tenant of Landlord in the State of Apts in Boynton Beach, Florida OLEN shall hereinafter be referred to as
Florida and was a tenant at Landlord’s Indian Hills
during the year 2004. She vacated said apartment in June 2004. Within 10 days of her vacating the apartment Landlord then charged her “liquidated damages”, and a forfeiture of security deposit a “cancellation fee” as all exceeding $760 or “liquidated damage
approximately one months rent. Her lease also provided for a
fee”, a “rental concession payback fee”, an “insufficient notice fee”, and a forfeiture of security deposit, all of which shall hereinafter be referred to as the “Challenged Fees”. Landlord demanded payment of said $760 fee and threatened to report her to the credit bureau if she did not pay said fee. 3. Jurisdiction lies with the Circuit Court as this is a Class Action seeking
damages in excess of $15,000 but not in excess of $5,000,000 and other injunctive
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relief. 4. As part of its promotion and rental of apartment complexes in the State of
Florida the Landlord actively markets and solicits primarily younger persons as a major source of prospective tenants. Plaintiff was so solicited as further alleged herein
although the amount of fees and monthly rental varied. Landlord uses a uniform rental application process and form for all prospective tenants who will occupy and live in the Landlord's properties. Landlord uses a uniform Florida lease form for all tenants who will occupy and live in the Landlord's properties in Florida. After filling out an application form and paying a non refundable application fee the tenant is not given a copy of the prospective lease. The terms of the form lease are not disclosed on the Landlord’s web site. 5. After the prospective tenant has submitted the non refundable application the Landlord performs an
fee and completed the application form for occupancy
investigation or personal background check on the prospective tenant. If the tenant is approved he or she is asked to come back to the rental office and sign a lease. For the first time, the tenant is shown the prospective lease. A copy of the form lease used in
all transactions, including the Plaintiff Moss, in the State of Florida is attached hereto as Exhibit “B”. 6. The prospective tenant is given very little time to review the lease. If the approved tenant does review the lease and rejects its terms then the non refundable application fee is kept by the Landlord. The prospective tenant is many times asked to provide a “co-signer” to guarantee payment of all obligations under the lease. The prospective tenant is predominately inexperienced with commercial transactions and complicated lease contract terms. The relevant provisions of said form lease are outlined as follows:
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Rental Agreement 4. H. PROVISION BY RESIDENT(S) TO MANAGER OF THIRTY DAYS WRITTEN NOTICE PRIOR TO THE DATE OF EXPIRATION OF TERMINATION OF THE TERM OF THE LEASE. Failure to provide a full thirty days notice of intent to vacate shall result in the Resident being charged for the balance of the notice period an amount based on the daily pro-rata rental amount, such amount not to exceed one month’s rent. Such charge shall be considered liquidated damages under this lease agreement. ...
6. CANCELLATION FEE: Provided RESIDENT has not been in default hereunder during the term of this lease, and provided that RESIDENT strictly complies with the provisions of this paragraph, and has completed at least seven (7) months of occupancy, RESIDENT may cancel this lease before the expiration of the initial term by: (a) ensuring that MANAGEMENT receives 30 days written notice of cancellation, all before the first day of the month of RESIDENT’s proposed cancellation; plus (b) paying on the date RESIDENT gives written notice of cancellation, all monies due through the date of proposed move-out (the last day of the month of cancellation); plus (e) paying on the date RESIDENT gives written notice of cancellation, an additional amount equal to one month’s rent as liquidated damages; plus (d) returning the apartment in clean, ready-to-rent condition. RESIDENT’S exercise of this provision shall not relieve RESIDENT of any responsibilities regarding damage to the apartment. If the above conditions are met, RESIDENT will be entitled to the return of their security deposit described above less any damages in excess of normal wear and tear. Upon completion of one (1) twelve (12) month lease term, the seven (7) month minimum residency will no longer apply. Items a, b,c, and d of this clause still remain in effect for early cancellation. .....
16. DEFAULT BY RESIDENT. If any rent required by this Lease shalt not be paid when due, or if the Resident in any other manner fails to perform any of the terms or conditions of this Lease, including any of the provisions of the Rules and Regulations and any other applicable addendum hereto, Resident shall be deemed to have breached this Lease, and Management shall have all rights provided under state law and this Lease, including the right to terminate the Lease, retake possession of the premises, and recover
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damages. The parties agree in advance that if Resident fails to perform the provisions of paragraph 6 herein, and, prior to the expiration or termination of this Lease, the Resident vacates the premises either voluntarily or involuntarily, Resident shall be obligated to Management for an amount equivalent to 3 months rent which amount shall operate as liquidated damages. In the event of any other Breech of this lease inclusive of any property damage, Management shall be entitled to all remedies as provided by Florida Statute Chapter 83 and all other relevant provisions of State and Federal Law and as provided in this Lease. Retention of the Security Deposit or termination of this Lease by Management shall not constitute a limitation of Management’s right to damages. (RESIDENTS initials _____ ) ...... 28. BREACH OF AGREEMENT: Failure of RESIDENT to pay rent or other charges promptly when due or to comply with any other term or condition hereto or to comply with any other applicable provisions of the laws of the State of Florida, shall at the option of the MANAGEMENT empower them to terminate this tenancy upon giving proper notice as set forth in the RESIDENTIAL MANAGEMENT and RESIDENT Act contained in the Florida Statutes.
OLEN RESIDENTIAL REALTY CORP ADDENDUM TO LEASE Property: As a concession for signing a 13 month lease, the lessor will grant rent reduction of: $2376.00 This credit will be taken as follows (i.e., specify month): Apply $1440 concession to rent for the month of November 2003. In addition apply $72.OO concession to rent up to and not exceeding November 2004 for Law enforcement discount. In addition apply $46.00 concession to rent for the month of October 2003 for law enforcement discount for remainder of month. This concession is granted and will be applied as a rent credit if: A) The resident makes each monthly payment on or before the fifth (5th) day of each month. B) The resident occupies the premises for the full term of the lease.
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If the resident fails to make timely payment, or vacate the unit before the end of the 13 month term, then the credit listed above will be withdrawn and the amount will be due and payable to the lessor.
7.
Landlord employs uniform forms, policies, and process for all tenants who
terminate their tenancy, or who’s tenancy expires, and vacate the Landlord's properties. These forms, policies and process were used with the Plaintiff Moss and were and are uniformly used at the 11 rental complexes in the State of Florida by Landlord against all tenants in Florida although the amounts of certain fees and rentals varied.
CLASS REPRESENTATION ALLEGATIONS
8. Once the tenant has taken occupancy of the apartment Landlord imposes
certain uniform policies which can be divided into three categories of tenants: a. Tenants that fail to pay their rent and must be evicted through legal process are Evicted Tenants. It is Landlord's policy to aggressively evict those tenants who fail to pay their rent on time. Landlord uses the same law firms to assure a uniform policy of eviction through out the State. The Landlord's policy on evictions is to first have the tenant removed through a writ possession from the County Court. After the tenant is effectively removed from the premises the Landlord then re-lets the premises within a relatively short period of time. Landlord imposes the “Challenged Fees”, which
constitute up to four months’ rent, against the evicted tenant. See attached Exhibit “C”. Landlord pursues collection against Evicted Tenant by dunning letters, threats to report
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the tenant to the credit bureau, and sending the claim to a collection agency. Evicted Tenants fail to pay this demand for “Challenged Fees”
If
then Landlord will
deduct all or a portion of its claim from the Evicted Tenants’ security deposit or advanced rent. If the Evicted Tenants fail to pay this demand then it is Landlord's These demands are
uniform policy to enforce payment of the “Challenged Fees”.
made irrespective of when the apartment was re-rented and the Landlord’s actual loss of rentals. Evicted Tenants and their co-signers who received a demand to pay
“Challenged Fees” within the previous four (4) years are herein part of the Class. b. Tenants who moved or left their apartment prior to the expiration of
their rental term, but who have paid all or most of their rents due up to the date of moving, shall be referred to as “Early Termination Tenants”. Landlord has the same uniform policy for those Early Termination Tenants as it does for Evicted Tenants. Since the Early Termination Tenant has voluntarily removed him or herself from the apartment, eviction and a writ of possession are not needed from the County Court. After the Early Termination Tenant has vacated the apartment the Landlord then sends a statement to the payment, Early Termination Tenants and their co-signers demanding The statement demands the payment of If the Early Termination
see attached Exhibit “C".
“Challenged Fees”, which constitutes up to four month's rent.
Tenants or their co-signers fail to pay this demand for “Challenged Fees” then Landlord will deduct all or a portion of its claim from the Early Termination Tenants’ security deposit or advanced rent. If the Early Termination Tenants or their co-signers fail to
pay this demand then it is Landlord's uniform policy to enforce payment of the
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“Challenged Fees” through the collection agency process. “C".
See the attached Exhibit
These demands are made irrespective of when the apartment was re-rented and
the Landlord’s actual loss of rentals. Early Termination Tenants and their co-signers who received a demand to pay “Challenged Fees” within the previous four (4) years are herein part of the Class. c. Tenants who have completed the full term of their rental agreement,
vacated their apartments at the expiration of that term, and have paid all or most rents due, are referred to herein as “End of Term Tenants”. When the expiration of the lease term occurs, and the End of Term Tenants move out of the apartment, the Landlord then sends a notice to the End of Term Tenants and their co-signers, demanding that they pay an additional two months rent, or “Challenged Fees”, for their alleged failure to give a 30 day notice of renewal of their lease. If the End of Term Tenants or their co-
signers, fail to pay this demand then Landlord will deduct all or a portion of this claim from the End of Term Tenants’ security deposit or advanced rent. If the End of Term Tenants or their co-signers fail to pay this demand then it is Landlord's uniform policy to enforce same just as it does for Evicted Tenants and Early Termination Tenants. End of Term Tenants and their co-signers who received a demand to pay “Challenged Fees” within the previous four (4) years are herein part of the Class. 9. Landlord knows or should know that it’s collection methods described above
do not give it the legal right to collect multiple rent fees as a claim against Evicted Tenants, Early Termination Tenants and End of Term Tenants or their co-signers (hereinafter Class Tenants). The Landlord’s uniform policy is to always retake
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possession of the apartment and re-let the apartment after vacancy. Tenants
Charging Class
“Challenged Fees” is a practice which violates Florida law and public policy
as follows: a. Section 83.595, F.S. rental damages (invalid on it’s face). Landlord’s
charging of extra months rent for Class Tenants violates Section 83.595, F.S. which states: (2) If the landlord retakes possession of the dwelling unit for the account of the tenant, the landlord has a duty to exercise good faith in attempting to relet the premises, and any rentals received by the landlord as a result of the reletting shall be deducted from the balance of rent due from the tenant. For purposes of this section, "good faith in attempting to relet the premises" means that the landlord shall use at least the same efforts to relet the premises as were used in the initial rental or at least the same efforts as the landlord uses in attempting to lease other similar rental units but does not require the landlord to give a preference in leasing the premises over other vacant dwelling units that the landlord owns or has the responsibility to rent.
Class Tenants are charged the “Challenged Fees” if they fail to give 30 days notice of their termination. The charge is made regardless of when the unit is rerented. Current and past vacancy rates for Landlord’s apartments are known to the Landlord. Landlord receives double rent on the same apartment. Section
83.595, F.S strictly governs the damages Landlord may collect from Class Tenants for unpaid rent and limits that damage to the lost rentals from the time the Class Tenants vacate the unit until it is re-rented. Landlord’s “Challenged Fees” violate Section 83.595 F.S. b. Invalid Liquidated Damage Clause (invalid on it’s face). The Landlord’s lease imposing “Challenged Charges” is not a valid liquidated damage clause on
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the face of the lease.
Section 83.595 F.S. statutorily sets the damages a
Landlord may collect for lost rentals from a Tenant. The formula for computing these lost rentals in Section 83.595 is totally different then the formula in
Paragraphs 4,6, 16, and 28 of the lease. The measure of damages, once set by Legislative Act, cannot be nullified by a liquidated damage clause under Section 83.47 F.S. Sections 83.595 and 83.47 F.S. prohibit any kind of liquidated
damage clause for lost rents in a residential lease. The Landlord’s form lease contains an invalid liquidated damages clause on its face at common law. Paragraphs 16 and 28 of the lease allows Landlord full remedies for all its damages (up to 12 months rent) against an Early Termination Tenant even if those damages exceed the liquidated amount in Paragraphs 4H, 6 and 16 of the lease. On it’s face the lease does not set a mutually agreed
upon fixed liquidated damage because Landlord retains the right to sue for full actual damages without regard to the liquidated amounts. Because neither
Landlord or Tenant agreed to a stipulated sum in Paragraphs 16 and 28, of the lease as the agreed upon measure of damages the provisions in Paragraphs 4H, 6, 16 and the Rent Concession Addendum cannot be valid liquidated damage clauses and thus become unlawful penalties. c. Invalid Liquidated Damage Clause at Common Law. The Landlord’s lease contains an invalid liquidated damages clause for Class Tenants because it does not meet the common law test for liquidated damages. A liquidated damage clause is only valid when the parties, at the time they sign their contract: 1)
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cannot readily ascertain and foresee their damages in the event of a breach, and 2) agree to a liquidated amount which is not grossly disproportionate to
damages the parties might reasonably expect to follow from a breach. The Landlord’s lease fails this test because: i.) The Landlord’s damages in the event of breach are readily The
ascertainable and foreseeable before a one year lease is executed.
Landlord knows its vacancy rates for each apartment complex it operates and can compute with relative certainty the time the unit will remain vacant within that apartment complex after a future breach. Thus the
Landlord can readily compute its anticipated damages of lost rentals from a future breach. Landlord fails the first test for liquidated damages. ii.) The “Challenged Fees” stipulated to be forfeited by Class Tenants is grossly disproportionate to any damages that Landlord might reasonably be expected to follow from a breach. The Landlord’s vacancy rates are so low that units on an average in each apartment complex stay vacant less than one month. Landlord fails the second test for liquidated damages.
10.
The Class Tenants and Plaintiff meet
the requirements for Class
Certification under Rule 1.220 (b)(1) and (b)(2), Fla.R.C.P.: a. Numerosity: The proposed Class, which consists of over 3,300
past and present Florida tenants and co-signers, is so numerous that joinder of all members is impracticable.
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b.
Commonality:
There are questions of law and fact which are
common to the Class, including whether charging “Challenged Fees”, is an intentional but unlawful practice to impose a penalty charge and whether the Landlord committed unlawful consumer collection practices under the Florida Consumer Collection Practices Act or committed deceptive, unconscionable and unfair trade practices under the
Florida Deceptive and Unfair Trade Practices Act all as alleged herein. The charging of “Challenged Fees” is unlawful under Florida law and public policy.
c.
Typicality: Plaintiff Samantha Moss’s claim is
typical of those of
the Class Tenants. Plaintiff Moss was subject to the same “Challenged Fees” and collection methods as Class Tenants. Plaintiff Moss alleges the same type of injuries due to Landlord’s conduct, to wit: the statutory minimum damages, the actual damages for payment of “Challenged Fees” and punitive damages. Plaintiff Moss has the same interest as Class Tenants in recovering damages, included statutory, punitive and /or actual damages, from the Landlord. d. Adequacy: Plaintiff Moss will fairly and adequately represent and
protect the interests of the Class Tenants, and Plaintiff has no interest antagonistic to those of the class. Furthermore, Plaintiff Moss has retained counsel who are competent, experienced and committed. e. Class Action under Rule 1.220(b)(3) — Predominance and Superiority: The common issues outlined herein predominate over any individual issues in the case and will be the focus of this litigation. Furthermore, a class action is superior to other available methods for the fair and efficient adjudication of this controversy for the following reasons: (i) it is economically impracticable for Class Tenants to prosecute individual actions because the individual claims are so small; (ii) Plaintiff is aware of no
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other litigation concerning this controversy already commenced by Class Tenants; (iii) it is desirable to concentrate these claims in a single forum because no member of the Class has sustained damages sufficient to warrant litigation of the claims separately; (iv) there are no difficulties likely to be encountered in the management of a class action.
Count I Chapter 559 Part VI, the Consumer Collection Practices Act
11. Paragraphs 1-10 are herein re-alleged. 12. Class Tenants and Plaintiff are consumers as they rent or have rented
apartments in the last four (4) years from Landlord for personal, family and household use. Landlord’s claim for “Challenged Fees” or portions thereof, is an attempt to collect an Plaintiff. alleged but unenforceable obligation or debt from Class Tenants and
Landlord has, as a consistent practice, demanded that Class Tenants and
Plaintiff pay these moneys all of which arise out of a transaction in which the moneys demanded and housing services provided are primarily for personal, family, or has been reduced to
household purposes, whether or not such obligation or debt
judgment. Landlord has threatened adverse credit reports, and has adversely reported to credit agencies, all to the detriment of Class Tenants and Plaintiff who have refused to pay these alleged but unenforceable obligations for “Challenged Fees”. 13. As a regular practice Landlord has, and continues to claim, attempt, or against Class not
threaten to enforce said obligation and debt for “Challenged Fees” Tenants and Plaintiff when Landlord legitimate and a violation of Florida law. knew that
said debt or obligation was
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14.
The Landlord’s said practice violates the provisions of Section 559.72(9)
Florida Statutes, giving rise to an action by Class Tenants under Section 559.77 F.S. for actual damages, those who paid said obligation or debt for “Challenged Fees” plus interest. Class Tenants have an action for $1000 in statutory damages plus actual damages plus punitive damages. 15. The Landlord intentionally engaged in a common unlawful practice as a business policy and enforced its intentional policy through its property managers and its collection department. The Landlord through its exclusive legal representative, had actual knowledge of the wrongfulness of its conduct and the high probability that injury or damage to class tenants would result as far back as 1999. Furthermore, on or about May 24, 2004 The Landlord had additional actual knowledge of the wrongfulness of its conduct through court rulings on it’s very lease and, despite this actual knowledge, intentionally pursued its unlawful business practices, resulting in injury and damage to the class tenants herein. The Landlord attempts to collect these illegal charges and reports all uncollected charges to the national credit bureau in an effort to impair the credit standing of these class tenants preventing their ability to obtain consumer credit or to rent other housing. These practices continue today even after proclamations by Judges in Palm Beach County unenforceable. that the subject lease provisions are illegal and
The Landlord’s conduct is so reckless or wanting in care that it rights of class members
constitutes a conscious disregard or indifference to the exposed to such conduct.
The Landlord and it's officers, attorneys and managers
actively and knowingly participated in said conduct or knowingly condoned, ratified, or
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consented to such conduct. Wherefore, Class Tenants and Plaintiff pray that this Court certify them as a class action and award them actual, statutory, and punitive damages, attorneys fees and court costs and to further enjoin Landlord from continuing said practices. Class Tenants and Plaintiff further demand trial by jury on all issues triable by jury.
Count II Chapter 501 Part II, the Florida Deceptive and Unfair Trade Practices Act
16. Paragraphs 1-10 are herein re-alleged. 17. Class Tenants and Plaintiff are consumers as they rent or have rented
apartments in the last four (4) years from Landlord for personal, family and household use. Landlord’s claim for collect an Plaintiff. “Challenged Fees”, or portions thereof, is an attempt to from Class Tenants and
alleged but unenforceable obligation or debt
Landlord has, as a consistent practice, demanded that Class Tenants and
Plaintiff pay these moneys all of which arise out of a transaction in which the moneys demanded and housing services provided are primarily for personal, family, or has been reduced to
household purposes, whether or not such obligation or debt judgment.
Landlord has threatened adverse credit reports, and has adversely
reported to credit agencies, all to the detriment of Class Tenants and Plaintiff who have refused to pay these alleged but unenforceable obligations for “Challenged Fees”. 18. As a regular practice Landlord has, and continues to claim, attempt, or against Class
threaten to enforce said obligation and debt for “Challenged Fees”
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Tenants and Plaintiff, all of which constitute unfair, deceptive and unconscionable trade practices. Landlord’s practice of not allowing a timely preview of the form lease terms, imposing terms which attempt to require Class Tenants and Plaintiff to pay penalties all constitute unfair, deceptive and unconscionable trade practices. 19. The Landlord’ s said practices violate the provisions of Section 501.204, giving rise to an action by Class Tenants and Plaintiff for actual
Florida Statutes,
damages incurred, those who paid said obligation or debt for “Challenged Fees” plus interest, plus attorneys fees and costs all pursuant to Section 501.2105 and 501.211, F.S. Wherefore, Class Tenants and Plaintiff pray that this Court certify them as a class action and award them actual damages, interest, attorneys fees and court costs and to further enjoin Landlord from continuing said practices. Class Tenants and Plaintiff further demand trial by jury on all issues triable by jury.
I HEREBY CERTIFY that a correct copy of the foregoing has been furnished by mail to Charles C. Papy, Jr. Esq. , P.O. Box 141939, Coral Gables, FL 33114-1939 and Henry Trawick Esq., PO Box 4009, Sarasota, FL Attorneys for Defendants, this 3rd day of November, 2006.
ATTORNEYS FOR CLASS PLAINTIFFS BABBITT, JOHNSON, OSBORNE AND LECLAINCHE, P.A. 1450 Centrepark Blvd, Suite 100 West Palm Beach, Florida 33401 (561) 684-2500 ROD TENNYSON, P.A. 1450 Centrepark Blvd, Suite 100 West Palm Beach, Florida 33401 16
(561) 478-7600 By: _______________________________ ROD TENNYSON Florida Bar No. 149479
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