Kaia Leibo et al vs IV Properties Inc.

Case Number

23CV03826

Case Type

Hearing Date / Time

Wed, 08/07/2024 - 11:30

Nature of Proceedings

Motion: Class Certification

Tentative Ruling

Class Action Certification Motion

August 7, 2024

11:30am

Kaia Leibo, Abby Wilbur, Benjamin Richardson vs IV Properties 23CV03826

Attorneys

Plaintiffs by Gregory Nelson, Gregory Suhr

Defendant by Stephen Acker

Emails:

Issue

Class Action Certification Motion.

Ruling

1. The Court finds that the case would benefit if there was no ruling made on the motion today.

2. The Class Action certification motion is continued sua sponte to August 21, 2024, at 10am.

Background

Plaintiffs Kaia Leibo (Leibo), Benjamin Richardson (Richardson), and Abby Wilbur (Wilbur) (collectively, Plaintiffs), individually and on behalf of others similarly situated, filed their original class action complaint in this matter on September 5, 2023, alleging three causes of action against Defendant IV Properties, Inc. (IVP): (1) bad faith retention of security deposit (Civ. Code, § 1950.5); (2) fraud; and (3) unlawful, unfair, and fraudulent business practices (Bus. & Prof. Code, § 17200 et seq.) As alleged in the complaint:

On November 15, 2021, Richardson together with Sophia Nelson, Parker Barandon, David Obbard, and Christine Le Forge (the Unit 3 Tenants) entered into a lease (the Unit 3 Lease) to rent a residential housing unit (Unit 3) in a multi-unit complex located at 6587 Picasso Road in Goleta, California (the premises).

On November 18, 2021, Wilbur together with Kayla Hamm, Alyssa Harriman, Eden Thorson, and Audrey Teresi (the Unit 4 Tenants) entered into a lease (the Unit 4 Lease) to rent a residential housing unit (Unit 4) in the premises. 

On November 19, 2021, Leibo together with Ashlynn Urie, Paige Hutchison, and Carol Heimer (the Unit 2 Tenants) entered into a lease (the Unit 2 Lease) to rent a residential housing unit (Unit 2) in the premises.

The Unit 2 Lease, the Unit 3 Lease, and the Unit 4 Lease (collectively, the Subject Leases) do not expressly identify the owner of Unit 2, Unit 3, or Unit 4 (collectively, the Subject Units). The Unit 2 Tenants, Unit 3 Tenants, and Unit 4 Tenants (collectively, the Tenants) are unaware of the identity of the owner of the Subject Units, but the Tenants interacted solely with IVP during the events described in the complaint. The term of each of the Subject Leases lasted from July 15, 2022 to June 25, 2023.

The Tenants are college students who lived in the Subject Units for the 2022-2023 school year.

The Subject Leases required the Tenants to pay a security deposit and provide that the security deposits “will be refunded, less deductions, as allowed by law.” Plaintiffs read this language and relied upon it in signing the Subject Leases. The Subject Leases further provide that if the Subject Units were painted after termination of the Subject Leases, the amount deducted from the security deposit for such paint costs would be “prorated based on a five (5) year life of the painting[.]”

As required by the Unit 2 Lease, the Unit 2 Tenants paid a security deposit of $9,500 to IVP (the Unit 2 Security Deposit) prior to the beginning of the term of the Unit 2 Lease.

Leibo contributed one-fourth of the Unit 2 Security Deposit and agreed to split four-ways with the other Unit 2 Tenants any amount of the Unit 2 Security Deposit that was returned.

As required by the Unit 3 Lease, the Unit 3 Tenants paid a security deposit of $9,750 to IVP (the Unit 3 Security Deposit) prior to the beginning of the term of the Unit 3 Lease.

Richardson contributed one-fifth of the Unit 3 Security Deposit and agreed to split five-ways with the other Unit 3 Tenants any amount of the Unit 3 Security Deposit that was returned.

As required by the Unit 4 Lease, the Unit 4 Tenants paid a security deposit of $11,400.00 to IVP (the Unit 4 Security Deposit) prior to the beginning of the term of the Unit 4 Lease.

Wilbur contributed one-fifth of the Unit 4 Security Deposit and agreed to split five-ways with the other Unit 4 Tenants any amount of the Unit 4 Security Deposit that was returned.

On June 16, 2023, before the Unit 2 Lease and the Unit 3 Lease terminated, IVP performed an initial inspection of Unit 2 and Unit 3 and rendered a written statement identifying items for repair and cleaning. Before vacating Unit 2, the Unit 2 Tenants hired a professional cleaner who was familiar with IVP and its expectations of cleanliness upon move out and who cleaned the unit and returned Unit 2 to its level of cleanliness at move-in. Before vacating Unit 3, the Unit 3 Tenants cleaned the unit and returned it to its level of cleanliness at move-in.

The Unit 4 Tenants thoroughly cleaned Unit 4 and returned it to its level of cleanliness at move-in prior to vacating Unit 4. The Unit 2 Tenants and the Unit 3 Tenants removed all their belongings from the units before departing. The Tenants vacated the Subject Units on June 25, 2023, at the termination of the Subject Leases. 

On July 10, 2023, IVP rendered a security deposit disposition statement to each of the Tenants which laid out IVP’s deductions to the Unit 2 Security Deposit, the Unit 3 Security Deposit, and the Unit 4 Security Deposit.

IVP returned $1,671.87 of the Unit 2 Security Deposit after making $7,828.13 in deductions. IVP returned to the Unit 3 Tenants $7,371.04 of the Unit 3 Security Deposit, after deducting $2,378.96. IVP returned $6,894.81 of the Unit 4 Security Deposit after making $4,505.19 in deductions. In returning the security deposits, IVP, among other things; made deductions for items that were not mentioned on IVP’s pre-moveout statements of deficiencies, for damages that predated Plaintiffs’ tenancies, for ordinary wear and tear, and for unreasonable repairs and cleaning costs; failed to prorate costs of painting before deducting from the Tenants’ security deposits; and, provided vague descriptions of items for which deductions were made. Plaintiffs would not have signed the Subject Leases if they knew that IVP would not properly refund security deposits minus lawful deductions or that IVP had a policy or practice of deducting from security deposits amounts that exceed those which are lawful.

Demurrer/Motion to Strike

Defendant’s demurrer and motion to strike were overruled on 11/8/23.

Defendant filed a general answer on 11/9/23, alleging 19 Affirmative Defenses.

Motion for Class Action Certification.

The Motion was filed 7/10/24; set for 11/7/24 at 11:30am; 26 pages; summarized: Plaintiffs move this Court for an Order finding that the present action is manageable as a class action and certifying the following proposed class with Plaintiffs as representatives and Gregory K. Nelson and Gregory N. Suhr as class counsel.  The proposed class is defined as all persons who leased properties from Defendant, paid a security deposit to Defendant, and from whom Defendant withheld $125 or more from their security deposit from May 2020 to present. The motion is based on the following grounds (1) the proposed class is ascertainable; (2) the proposed class is sufficiently numerous to warrant prosecution as a class action; (3) the proposed class members have an adequate community of interests to warrant prosecution as a class action; (4) the claims of the class representative plaintiffs are typical of the claims of the other class members; (5) the representative plaintiffs and their counsel are adequate for the purposes of class certifications; and (6) there are factual and legal issues common to the class as a whole, sufficient in importance so that their adjudication on a class basis is a superior means of litigation for the parties and the Court.

The Opposition was filed 7/24/24; summarized; contends the motion should be denied because of a lack of commonality of facts between the claims of the more than 1,000 prospective class members.  Defendant IV Properties, Inc. (“IVP”) is property manager of dozens of student housing properties in Isla Vista, adjacent to UCSB.  Because leases are typically renewed annually concurrently with the academic year, and each leased unit presents different facts as to the appropriateness of security deposit refunds after apartments have been cleaned and repaired, no significant benefit is served by litigating the matter as a class.  

The Reply was filed 7/31/24; summarized; Defendant’s Opposition to Plaintiffs’ Motion for Class Certification is emblematic of Defendant’s attitude towards security deposit deductions.  The brief is curt, underexplained, and dismissive of (or entirely aloof to) legitimate concerns and arguments contrary to its position, just as Defendant is curt, underexplained, and dismissive to tenants who ask Defendant to justify its exorbitant security deposit deductions.  The Opposition fails to rebut all of Plaintiffs’ core arguments in support of class certification.  The Opposition does not contain a single citation to the Motion, any quotation from, reference to, or summary of any of the Motion’s arguments, or any counterargument that contends specifically with the arguments made in Plaintiffs’ Motion.  In other words, Defendant has not submitted a substantively meaningful opposition.  Plaintiffs on the other hand have explained in great detail—in their Motion, supporting declarations, and trial management plan—the various unlawful policies and practices Defendant employs against the Class, why adjudication of this case will not be unduly imbued with individualized issues, and how a class trial in this matter can be effectively managed.  Class certification should be granted in this case.

The Court’s Conclusions

After reading all the documents submitted on this motion the Court has reached the conclusion that the matter should be continued two weeks to allow counsel to attempt to settle the case.