Mariusz Jarzyna v. Home Properties, L.P.

• Court: Court of Appeals for the Third Circuit
• Decided: July 12, 2019
• Docket: 18-3012
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ________________

No. 18-3012 ________________

MARIUSZ G. JARZYNA,

Appellant

v.

HOME PROPERTIES, L.P.; FAIR COLLECTIONS AND OUTSOURCING, INC.

________________

Appeal from the United States District Court for the Eastern District of Pennsylvania (D.C. Civil Action No. 5-10-cv-04191) District Judge: Honorable Eduardo C. Robreno ________________

Submitted Under Third Circuit L.A.R. 34.1(a) June 17, 2019

Before: AMBRO, RESTREPO, and FISHER, Circuit Judges

(Opinion filed July 12, 2019) ________________

OPINION* ________________

AMBRO, Circuit Judge

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. This case began as putative class action by Mariusz Jarzyna on behalf of more

than 10,000 current and former tenants of residential apartment complexes operated by

Home Properties LP. Over seven years of litigation, it was whittled down to a one-claim

landlord–tenant dispute over a single month’s rent somewhere in the range of $900.

There were many battles along the way, resulting in motions for sanctions, the

appointment of a special master, and the issuance of more than fifteen substantive

opinions by the District Court. In that Court’s words, the case traveled “an unusually

circuitous and contentious path.” (App. 206.) In the end, the Court entered summary

judgment against Jarzyna on all his claims against Home and entered a $888 judgment in

favor of Home on its counterclaim against Jarzyna after a one-day bench trial.

He appeals to us raising several claims of error. We affirm in all respects save

one: we conclude the trial record does not support a judgment of $888 in favor of Home;

we instead remand for entry of a judgment in the lesser amount of $643.79 plus

applicable interest and fees as determined by the District Court.

I. Background

Jarzyna filed this action in 2010 seeking to represent a class of tenants who have

rented apartments from Home in Pennsylvania and elsewhere. Broadly, he alleged that

Home overcharged him and other tenants for rent, utility fees, and certain penalties when

their leases were converted from annual leases into month-to-month rentals, as commonly

occurred for tenants who did not timely renew their annual leases. He also alleged that

Home and its agent, co-defendant Fair Collection and Outsourcing Inc., violated the Fair

2 Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692 et seq., by demanding

payment for the overcharged amounts.

The complaint alleged six claims. Against both Home and Fair Collection, it

alleged: (1) violation of the FDCPA, (2) violation of the Pennsylvania Fair Credit

Extension Uniformity Act (“Fair Credit Act”), (3) violation of the Pennsylvania Unfair

Trade Practices and Consumer Protection Law (“Consumer Protection Law”), (4) civil

conspiracy, and (5) unjust enrichment. Against Home, it also alleged (6) violation of

Pennsylvania’s Landlord Tenant Act. Home filed a counterclaim against Jarzyna for rent

in arrears. The District Court had jurisdiction under 28 U.S.C. § 1331 for the federal

claims, and it exercised supplemental jurisdiction under 28 U.S.C. § 1367(a) for the

accompanying state-law claims.

Among other things, in its many opinions the Court (i) granted summary judgment

in favor of Jarzyna on his FDCPA claim against Fair Collection, (ii) granted summary

judgment in favor of Home and Fair Collection on all of Jarzyna’s other claims,

(iii) denied Jarzyna’s motion to certify a class on the FDCPA claim against Fair

Collection because Jarzyna failed to show that members of the class were ascertainable,

(iv) denied certain motions by Jarzyna to compel additional discovery, and (v) denied

various motions for sanctions stemming from hostility between counsel of record.

Jarzyna and Fair Collection settled the FDCPA claim a few months before trial, so

the only claim remaining was Home’s counterclaim against Jarzyna. After a bench trial,

the Court entered judgment in favor of Home for $888 on the counterclaim.

3 II. Discussion

Jarzyna raises four issues on appeal. He contends the Court (1) should not have

granted summary judgment in favor of Home on Jarzyna’s Fair Credit Act, Consumer

Protection Law, and Landlord Tenant Act claims; (2) should have reconsidered those

summary-judgment rulings when, later in the case, Home produced supplemental

discovery that Jarzyna says would have supported the defeated claims; (3) should have

granted various motions that Jarzyna filed based on Home’s alleged foot-dragging in

discovery; and (4) should have entered judgment as a matter of law in favor of Jarzyna on

Home’s counterclaim. He asks us to reinstate his claims against Home under the Fair

Credit Act, the Consumer Protection Law, and the Landlord Tenant Act. He also

requests that we vacate the $888 judgment in favor of Home on its counterclaim.

A. Summary Judgment on Jarzyna’s Claims

To sustain each of his claims, Jarzyna had to show that Home owed him

repayment of some of his security deposit when his tenancy ended. This is so under the

Consumer Protection Law because that claim requires the showing of “ascertainable loss”

resulting from the defendant’s alleged misconduct. See Kirwin v. Sussman Auto., 149

A.3d 333, 336 (Pa. Super. Ct. 2016) (citing 73 P.S. § 201-9.2). The same is true under

the Fair Credit Act because that statute piggybacks on the Consumer Protection Law for

its remedial mechanism, which, as noted, contains the “ascertainable loss” requirement.

See Kern v. Lehigh Valley Hosp., Inc., 108 A.3d 1281, 1290 (Pa. Super. Ct. 2015). The

requirement applies also to his Landlord Tenant Act claim, as Jarzyna based it on Home’s

4 alleged withholding of his security deposit in excess of his rents in arrears. (App. Vol. II

at 259–61; Jarzyna Br. at 30.)

Against this background, we agree with the District Court: the record evidence

shows as a matter of law that, at the end of his tenancy, Jarzyna owed more in rent than

the amount of his remaining security deposit.

We reach this conclusion by applying the plain terms of the tenancy to the

undisputed facts. The lease between Jarzyna and Home provided a mechanism for

automatically converting his tenancy from yearly to monthly. (App. Vol. II at 297.) That

mechanism was triggered in August 2009 when Jarzyna continued to occupy the premises

beyond the end of his one-year lease. (App. Vol. III at 220.) He continued his month-to-

month tenancy until October 28, 2009, when he notified Home of his intention to

terminate the lease. (App. II at 316–17.) Under its plain terms, that termination became

effective on November 30, 2009. (App. II at 297.) This means Jarzyna owed some $888

in rent for November 2009, yet—undisputedly—he did not pay any of that rent. Home

was within its right under the lease to apply his remaining security deposit (somewhere

between $244.21 and $500) to that unpaid rent. (App. II at 297.)1 Thus there is no

ascertainable loss, or any withholding of a security deposit, to sustain Jarzyna’s claims

1 The parties dispute whether Jarzyna owed additional back-rent for time periods before November 2009. We do not address that dispute because, regardless how it would be resolved, he clearly owed more in rent than the amount of his remaining security deposit at the end of his tenancy. 5 under the Fair Credit Act, Consumer Protection Law, and Landlord Tenant Act. So we

affirm summary judgment on those claims.2

B. Jarzyna’s Discovery Motions

Jarzyna appeals the District Court’s denial of three discovery motions: (1) for

additional discovery, (2) for sanctions, and (3) to reallocate fees paid to the special master

brought in by the District Court to assist with discovery. We review all three decisions

for abuse of discretion. See Eisai, Inc. v. Sanofi Aventis U.S., LLC, 821 F.3d 394, 402

(3d Cir. 2016) (discovery decisions); Naviant Mktg. Solutions, Inc. v. Larry Tucker, Inc.,

339 F.3d 180, 185 (3d Cir. 2003) (sanctions); Wright & Miller, 9C Fed. Prac. & Proc.

Civ. § 2608 (3d ed.) (allocation of fees).

In his motion for additional discovery, Jarzyna sought to depose or re-depose two

Home witnesses. Under Federal Rule of Civil Procedure 30(a)(2), a party must obtain

leave of court to depose a witness “if the deponent has already been deposed in the case.”

Fed. R. Civ. P. 30(a)(2)(A)(ii). But regardless whether the District Court should not have

denied Jarzyna’s motion to depose or re-depose these witnesses, any error was harmless;

by Jarzyna’s own admission, the additional depositions were directed to class

certification. (See Jarzyna Br. at 44–46.) Jarzyna gives us no reason to believe those

depositions would have revealed evidence that could save his claims from summary

judgment for failing to show ascertainable loss. (See id.)

2 For the same reasons, we affirm the District Court’s denial of Jarzyna’s motion for reconsideration of summary judgment on the claims. 6 In his motion for sanctions, Jarzyna requested them under Federal Rules of Civil

Procedure 26(g)(2) and 37(a)–(d), as well as 28 U.S.C. § 1927 and District Court Local

Rule 83.6.1. These authorities permit a district court to impose sanctions in a variety of

circumstances, none of which are met here. Rules 26(g)(2), 37(c) and 37(d) authorize

sanctions when a party completely fails to respond or provide information, but Home

responded to all of Jarzyna’s requests, although some were delayed. Rule 37(b)

authorizes sanctions when a party fails to comply with a court order, but no court order

compelled the requested discovery. Further, Jarzyna was not entitled to sanctions under

Rule 37(a) because he did not first “attempt[] in good faith to obtain the disclosure or

discovery without court action.” Fed. R. Civ. P. 37(a)(5)(A). Finally, 28 U.S.C. § 1927

and L.R. 83.6.1 authorize sanctions on a showing of bad faith, see Grider v. Keystone

Health Plan Cent., Inc., 580 F.3d 119, 142 (3d Cir. 2009), but nothing in the record

indicates that the District Court abused its discretion when it determined that Home

Properties did not act in bad faith.

In his motion to reallocate special master fees, Jarzyna argued that Home was

more responsible for, and thus should have paid a greater percentage of, the fees owed to

the special master for her work resolving discovery disputes in this case. The authority to

allocate special master fees based on each litigant’s relative fault is in Federal Rule of

Civil Procedure 53(g)(3), which calls for allocation of payments after considering “the

nature and amount of the controversy, the parties’ means, and the extent to which any

party is more responsible than other parties for the reference to a master.” The District

Court adopted the special master’s recommendation that Jarzyna pay the bulk of the

7 special master fees because he was mostly responsible for the waste of resources caused

by the parties’ various discovery disputes. On appeal Jarzyna vaguely contends that

allocation was improper, but he does not identify any specific error in the special

master’s analysis, nor does he develop the context of the allocation sufficiently for us to

discern whether it was an abuse of discretion. Whether we say he waived the argument

or merely did not substantiate it, the result is the same; we affirm the allocation.

C. Judgment on Home’s Counterclaim

At trial the only claim remaining was Home’s counterclaim against Jarzyna for

unpaid rent and utilities. (App. Vol. I at 207.) After a one-day bench trial, the District

Court entered judgment in favor of Home on its counterclaim in the amount of one

month’s rent, or $888. (App. Vol. I at 217–18, 221.)

On appeal from a bench trial, we review a district court’s findings of fact for clear

error and its conclusions of law de novo. VICI Racing, LLC v. T-Mobile USA, Inc., 763

F.3d 273, 282–83 (3d Cir. 2014). For mixed questions of law and fact “we apply the

clearly erroneous standard except that the District Court’s choice and interpretation of

legal precepts remain subject to plenary review.” Id. (quoting Gordon v. Lewistown

Hosp., 423 F.3d 184, 201 (3d Cir. 2005)).

To establish a claim for breach of the lease, Home was required to show (1) the

existence of the lease, including its essential terms, (2) a breach of the contract by

Jarzyna, and (3) resulting damages. Meyer, Darragh, Buckler, Bebenek & Eck, PLLC v.

Law Firm of Malone Middleman, PC, 137 A.3d 1247, 1258 (Pa. 2016) (citing J.F.

Walker Co. v. Excalibur Oil Grp., Inc., 792 A.2d 1269, 1272 (Pa. Super. Ct. 2002)).

8 At trial Home called no witnesses. Instead it presented various admissions by

Jarzyna concerning his acceptance of the lease, his conversion into a month-to-month

tenancy, and his eventual departure from the premises. Home also presented payment

ledgers that it had maintained, but it did not call any witnesses to interpret them for the

District Judge, leaving both him and us without adequate guidance to parse them

definitely. By presenting its case in this manner, Home left a glaring hole in the record:

although it adequately proved the existence of the lease and Jarzyna’s various obligations

to pay rent and other fees, it did not submit evidence sufficient to determine how much

Jarzyna paid to Home over the course of his tenancy. As a result, the record does not

contain an adequate basis from which to determine the extent of damages on Home’s

counterclaim.

The District Court elided this gap in the record by concluding that,

notwithstanding the obvious flaw in Home’s method of presenting its case, there was

nonetheless sufficient evidence to conclude that Jarzyna owed $888 for October 2009

rent. (App. Vol. I at 215.) That conclusion was inconsistent, however, with its prior

ruling that Jarzyna’s security deposit could be applied to his October 2009 rent.

Furthermore, it was not supported by the trial record because Home never proved the

extent, if any, that October 2009 rent was paid by Jarzyna or covered by his security

deposit. The record shows the debit for October 2009 ($888), but it doesn’t show the

credit (an unknown quantity).

We nonetheless believe the record was sufficient to rule in favor of Home on its

counterclaim, although for a smaller amount. We reach this conclusion by applying the

9 law to the facts that Jarzyna has conceded in the record. According to him, when he gave

notice of termination of the lease on October 28, 2009, he was owed $244.21 in his

security deposit. (Jarzyna Br. at 6.) He also states the factual predicates of that

calculation, two of which are relevant here: (1) he did not owe a lease break fee, and

(2) he did not owe rent for November 2009. (See id.) The problem with this calculation

is clear. As noted above, under the plain terms of the lease, Jarzyna’s termination

became effective on November 30, 2009, so he owed $888 in rent for November 2009.

He takes issue with Home’s having labeled that rent payment as a “LBF” in a ledger

(short for “lease break fee”), but he does not create a genuine dispute over his legal

obligation, under the plain terms of the agreement, to make a payment of that amount.

Thus, even taking all Jarzyna’s factual assertions as true, we conclude that he owed at

least $643.79 ($888 minus $244.21) when his tenancy ended. Accordingly, although we

cannot sustain the District Court’s entry of judgment for $888, we remand with

instructions to enter judgment in favor of Home in the amount of $643.79 plus applicable

interest and fees as determined by the District Court.