Tiffany Bass v. Weinstein Management Co., Inc.

56 F.4th 355
CourtCourt of Appeals for the Fourth Circuit
DecidedDecember 29, 2022
Docket21-2101
StatusPublished
Cited by4 cases

This text of 56 F.4th 355 (Tiffany Bass v. Weinstein Management Co., Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tiffany Bass v. Weinstein Management Co., Inc., 56 F.4th 355 (4th Cir. 2022).

Opinion

USCA4 Appeal: 21-2101 Doc: 66 Filed: 12/29/2022 Pg: 1 of 17

PUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 21-2101

TIFFANY BASS; PAULA WIGGINS, on behalf of themselves and all others similarly situated,

Plaintiffs - Appellants,

v.

WEINSTEIN MANAGEMENT CO., INC.; WMCI CHARLOTTE XIII, LLC, d/b/a Bexley Village at Concord Mills,

Defendants - Appellees.

----------------------------------

CORTLAND MANAGEMENT, LLC, CROSS POINT NC PARTNERS, LLC.,

Amicus Supporting Appellees.

Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Catherine C. Eagles, District Judge. (1:20-cv-00916-CCE-JLW)

Argued: September 13, 2022 Decided: December 29, 2022

Before NIEMEYER and WYNN, Circuit Judges, and FLOYD, Senior Circuit Judge.

Affirmed by published opinion. Senior Judge Floyd wrote the opinion, in which Judge Niemeyer and Judge Wynn joined. USCA4 Appeal: 21-2101 Doc: 66 Filed: 12/29/2022 Pg: 2 of 17

ARGUED: Edward H. Maginnis, MAGGINS HOWARD, Raleigh, North Carolina, for Appellants. Mark P. Henriques, WOMBLE BOND DICKINSON (US) LLP, Charlotte, North Carolina, for Appellees. ON BRIEF: Scott C. Harris, Patrick M. Wallace, MILBERG COLEMAN BRYSON PHILLIPS & GROSSMAN, PLLC, Raleigh, North Carolina; Karl S. Gwaltney, MAGINNIS HOWARD, Raleigh, North Carolina, for Appellants. Matthew F. Tilley, Michael A. Ingersoll, WOMBLE BOND DICKINSON (US) LLP, Charlotte, North Carolina, for Appellees. Nicole M. Strickler, MESSER STRICKLER BURNETTE, LTD., Barrington, Illinois, for Amici Curiae.

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FLOYD, Senior Circuit Judge:

Tiffany Bass and Paula Wiggins (collectively, Plaintiffs) brought suit against

Weinstein Management Co., Inc., and WMCI Charlotte XIII, LLC (collectively,

Defendants). In relevant part, Plaintiffs alleged that Defendants violated the North

Carolina Residential Rental Agreements Act (RRAA), N.C. Gen. Stat. § 42-46, and the

North Carolina Debt Collection Act (NCDCA), N.C. Gen Stat. § 75-50, by charging them

out-of-pocket costs for summary ejectment proceedings, including filing fees, service fees,

and attorney’s fees (collectively, out-of-pocket expenses). The district court granted

Defendants’ motion for judgment on the pleadings on these claims, and Plaintiffs now

appeal. For the reasons that follow, we affirm the district court.

I.

A.

This case centers on a landlord’s ability to charge and recover fees from a tenant in

default of her lease under section 42-46 of the RRAA. Relevant here, the North Carolina

General Assembly (the General Assembly) amended this provision in 2009, 2018, and

2021. Before 2009, North Carolina law regulated landlords’ ability to charge late fees, but

it did not restrict their authority to charge other fees or expenses. § 42-46 (2004) (setting

parameters for late fees); see, e.g., Friday v. United Dominion Realty Tr., Inc., 575 S.E.2d

532, 536 (N.C. Ct. App. 2003) (permitting an administrative fee to which a lessee

assented). In 2009, the General Assembly amended section 42-46 to prohibit landlords

from charging “any fee for filing a complaint for summary ejectment and/or money owed

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other than the ones expressly authorized by subsections (e) through (g)” of the provision.

N.C. Gen. Stat. § 42-46(h)(3) (2009). The 2009 amendment limited these authorized fees

to a complaint-filing fee, a court-appearance fee, a second trial fee, and reasonable

attorney’s fees as allowed by law. 1 § 42-46(e)–(g), (h)(3) (2009).

In 2018, the General Assembly amended section 42-26 again. It permitted the same

fees as the 2009 amendment, which it characterized as “administrative fees.” § 42-46(e)–

(g), (i) (2018). It also added the following “out-of-pocket expenses” to the list of

authorized charges:

(1) Filing fees charged by the court.

(2) Costs for service of process pursuant to G.S. 1A–1, Rule 4 of the North Carolina Rules of Civil Procedure[,] and G.S. 42–29.

(3) Reasonable attorneys’ fees actually incurred, pursuant to a written lease, not to exceed fifteen percent (15%) of the amount owed by the tenant, or fifteen percent (15%) of the monthly rent stated in the lease if the eviction is based on a default other than the nonpayment of rent.

1 Subsection (e) allowed a landlord to charge a complaint-filing fee that could not exceed $15 or 5% of the monthly rent (whichever is greater) only if “the tenant was in default of the lease, the landlord filed and served a complaint for summary ejectment and/or money owed, the tenant cured the default or claim, and the landlord dismissed the complaint prior to judgment.” N.C. Gen Stat. § 42-46(e) (2009). Subsection (f) permitted a landlord to charge a court-appearance fee in an amount equal to 10% of monthly rent only if “the tenant was in default of the lease; the landlord filed, served, and prosecuted successfully a complaint for summary ejectment and/or monies owed in the small claims court; and neither party appealed the judgment of the magistrate.” § 42-46(f) (2009). Subsection (g) allowed a landlord to charge a second trial fee not to exceed 12% of monthly rent if the landlord proved the tenant was in default of the lease and the landlord prevailed. § 42-46(g) (2009).

4 USCA4 Appeal: 21-2101 Doc: 66 Filed: 12/29/2022 Pg: 5 of 17

N.C. Gen. Stat. § 42-46(i) (2018). This amendment did not expressly specify whether the

legislature intended it to apply retroactively to pending cases or prospectively to cases

brought on or after the effective date.

In 2020, the Fourth Circuit held—in an unpublished opinion—that the 2018

amendment substantively altered the rights of landlords and tenants by authorizing the out-

of-pocket expenses discussed above for the first time, and therefore, it did not apply

retroactively to pending cases. Suarez v. Camden Prop. Tr., 818 F. App’x 204, 209–10

(4th Cir. 2020).

The General Assembly amended section 42-46 once more in 2021 with a bill entitled

“An Act to Clarify and Reaffirm the Statutory Authority of Landlords to Recover Out-of-

Pocket Expenses and Litigation Costs in Summary Ejectment Proceedings and to Make

Various Changes to the Landlord/Tenant Statutes.” 2021 N.C. Sess. Laws 71 (codified at

N.C. Gen. Stat. § 42-46 (2021)). This amendment largely did not modify the substance of

the 2018 amendment, as it continued to permit landlords to collect administrative fees and

out-of-pocket expenses within the same limits. 2021 N.C. Sess. Laws 71, pt. I, § 1.1

(codified at § 42-46(e)–(g), (i) (2021)). Most importantly for this case, the amendment

stated that “[t]his Part is effective when it becomes law and is intended to apply

retroactively to all pending controversies as of that date. The amendments contained in

this Part are intended to be clarifying of the General Assembly’s intent under previous

amendments to this statute.” N.C. Sess. Laws 71, pt. I, § 1.2. With this legislative history

in mind, we now turn to the facts that gave rise to the instant matter.

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B.

Plaintiffs were tenants of a residential property that Defendants owned and

managed. On June 6, 2018, they fell behind on their rent, and Defendants charged them a

late fee. Plaintiffs then received a letter from Defendants that threatened to evict them and

to charge them out-of-pocket expenses associated with the eviction proceedings.

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