Equity Residential Properties Trust v. Yates
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2005
EQUITY RESIDENTIAL P ROPERTIES TRUST, EQUITY RESIDENTIAL
PROPERTIES MANAGEMENT CORP., EQUITY RESIDENTIAL
PROPERTIES MANAGEMENT CORP. II, EQUITY RESIDENTIAL
PROPERTIES MANAGEMENT LTD., EQUITY RESIDENTIAL
PROPERTIES MANAGEMENT LTD. II and ERP OPERATING LIMITED
PARTNERSHIP ,
Appellants,
v.
TAMMY YATES, PETER M ILLER, MARIA L. CRUZ and JOSE ORTEGA
as Class Representative s of those similarly situated,
Appellees.
Nos. 4D03-4571 & 4D04-1844
[September 21, 2005]
ON MOTION FOR REHEARING, REHEARING EN BANC &
CERTIFICATION
STEVENSON , C.J.
We withdraw our prior opinion and substitute the following in its
place, clarifying the nature of the trial court’s order regarding the
counterclaim; in all other respects the motion for rehearing, rehearing en
banc and certification is denied.
Tammy Yates, Peter Miller, Maria Cruz, and Jose Ortega brought suit
against their former landlord, the appellants in this case, alleging the
landlord was collecting what amounted to double rent in violation of
Florida’s Consumer Collection Practices Act (FCCPA) and Florida’s
Deceptive and Unfair Trade Practices Act (FDUTPA). According to the
plaintiffs, the landlord was accomplishing this by charging tenants “early
termination” and “insufficient notice” fees and then failing to credit the
tenants charged such fees for rent collected upon the re -letting of the
apartment unit. The four named plaintiffs sought certification of a class
action suit on behalf of some ten thousand plus individuals who had
been charged these “fees.” In turn, the landlord sought to bring a class-
wide counterclaim, seeking recovery of all fees and charges owed by
these tenants; these charges included not only the unpaid “early
termination” and “insufficient notice” fees, but also charges for damage
and repairs to each tenant’s particular unit. The trial court granted the
plaintiffs’ motion for class certification, but denied the landlord’s motion
for leave to bring a class-wide counterclaim. In this consolidated appeal,
the landlord challenges the trial court’s rulings certifying a class action
on behalf of the former tenants, but denying its motion to bring a classwide counterclaim. We affirm.
The former tenants sought class certification pursuant to Florida Rule
of Civil Procedure l.220(a) and (b)(3) and, thus, were required to
demonstrate
numerosity,
commonality,
typicality,
adequate
representation, predominance, and superiority.
The biggest hurdle
facing the former tenants was the landlord’s contention that the need for
individualized proof to establish damages necessarily undermined
commonality, typicality, predominance, and superiority. For purposes of
class certification, though, liability – not damages – is the focus of the
inquiry. See Oce Printing Sys. USA, Inc. v. Mailers Data Servs., Inc., 760
So. 2d 1037, 1043 (Fla. 2d DCA 2000). Class certification becomes
inappropriate only when the need to prove damages on an individualized
basis will play such a predominant role in the litigation as to significantly
outweigh any benefits to be gained by a class action lawsuit. See Philip
Morris USA, Inc. v. Hines, 883 So. 2d 292 (Fla. 4th DCA 2003), clarified
on reh’g, (Oct. 6, 2004); see also Perez v. Metabolife Int’l, Inc., 218 F.R.D.
262, 273 (S.D. Fla. 2003) (refusing to find “predominance” where “any
efficiency gained by deciding the common elements will be lost when
separate trials are required for each class member in order to determine
each member’s entitlement to the requested relief”). In this case, we find
no abuse of discretion in the trial court’s certification of a class action on
behalf of the former tenants and rejection of any claim that
individualized issues regarding damages would so overwhelm the
proceedings that a class action was untenable. See Stone v. Compuserve
Interactive Servs., Inc., 804 So. 2d 383, 387 (Fla. 4th DCA 2001)
(recognizing that trial court’s decision to certify class action is reviewed
on appeal for an abuse of discretion).
Next, relying upon Key Club Associates, L.P. v. Mayer, 718 So. 2d 346
(Fla. 2d DCA 1998), the landlord insists its counterclaim was compulsory
and, therefore, that the trial court could not simply deny its motion to
bring the class-wide counterclaim without taking steps to protect its due
process rights. In Key Club Associates, the trial court certified a group of
about 200 condominium owners in a class action to recover money that
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they claimed was due because Key Club, the manager of the
condominium resort hotel, had over-billed the unit owners for repairs,
maintenance and replacement of items in their units. In response, Key
Club alleged certain additional costs that had not been billed to the unit
owners, raised the defense of setoff and filed a counterclaim. The trial
court dismissed the counterclaim and ruled that, as a matter of law, a
counterclaim was improper for class action status. In reversing, t
he
Second District held that while “appropriate class action counterclaims
are few and far between,” they are not “nonexistent.” 718 So. 2d at 346.
The court in Key Club Associates refused to hold that class certification
of the counterclaim was necessarily appropriate in that case and
remanded the cause to the trial court to rule on the merits. Notably, Key
Club Associates also stands for the proposition that a counterclaim
which would be compulsory against an individual defendant in a nonclass action lawsuit, need not be certified as a counterclaim in a class
action lawsuit so long as the trial court considers measures to protect
the defendant’s right to pursue the claim. Id. at 346-47.
Here, w find no error in the trial court’s denial of the landlord’s
e
motion to bring a class-wide counterclaim. First, we do not find it
compulsory.
A counterclaim is compulsory if it bears a “logical
relationship” to the plaintiff’s claim. See Londono v. Turkey Creek, Inc.,
609 So. 2d 14 (Fla. 1992).
“‘[A] claim has a logical relationship to the original claim if it arises
out of the same aggregate of operative facts as the original claim in
two senses: (1) that the same aggregate of operative facts serves as
the basis for both claims; or (2) that the aggregate core of facts
upon which the original claim rests activates additional legal rights
in a party defendant that would otherwise remain dormant.’”
Id. at 20 (quoting Neil v. S. Fla. Auto Painters, Inc., 397 So. 2d 1160, 1164
(Fla. 3d DCA 1981) (quoting Revere Copper & Brass, Inc. v. Aetna Cas. &
Sur. Co., 426 F.2d 709, 715 (5th Cir. 1970)) (emphasis in original). The
bulk of authority on the issue holds that actions to collect debts are not
compulsory counterclaims to actions predicated on the violation of
consumer protection type laws. Cf. Whigum v. Heilig-Meyers Furniture,
Inc., 682 So. 2d 643 (Fla. 1st DCA 1996) (holding that an action to collect
debt for the purchase of consumer goods is not a compulsory
counterclaim to an action under the Florida Consumer Collection
Practices Act); Maddox v. Ky. Fin. Co., 736 F.2d 380 (6th Cir. 1984)
(holding that claim for underlying debt is not a compulsory counterclaim
to an action under the federal Truth in Lending Act); Peterson v. United
Accounts, Inc., 638 F.2d 1134 (8th Cir. 1981) (holding that an action
under the federal Fair Debt Collection Practices Act is not a compulsory
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counterclaim to an action to collect the debt); Egge v. Healthspan Servs.
Co., 115 F. Supp. 2d 1126, 1130 (D. Minn. 2000) (recognizing that
“[m]any courts note that no court has found that an FDCPA suit was a
compulsory counterclaim to a debt collection action”). Lastly, because
we have concluded that the counterclaims are not compulsory, Equity’s
right to pursue them in the future has been protected since that ruling is
now the law of the case.
We have considered the other issues in this appeal and find no error.
Accordingly, the appeal is affirmed.
Affirmed.
SHAHOOD and GROSS, JJ., concur.
*
*
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Consolidated a
ppeals of non-final and final orders from the Circuit
Court for the Fifteenth Judicial Circuit, Palm Beach County; Jorge
Labarga and Peter D. Blanc, Judges; L.T. Case Nos. CA 02-14116 AB &
502002CA014116XXOCAB.
Thomas E. Warner, Joseph Ianno, Jr., and Michael K. Winston of
Carlton Fields, P.A., West Palm Beach, and Craig M. White, Lucy C.
Lisiecki and Richard J. Jancasz of Wildman, Harrold, Allen & Dixon LLP,
Chicago, Illinois, for appellants.
Jane Kreusler-Walsh of Jane Kreusler-Walsh, P.A., Theodore Babbitt
and Joseph R. Johnson of Babbitt, Johnson, Osborne & LeClainche, and
Rodney L. Tennyson, West Palm Beach, for appellees.
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