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Carolyn Bethea, et al v. Israel Roizman

June 27, 2012

CAROLYN BETHEA, ET AL., PLAINTIFFS,
v.
ISRAEL ROIZMAN, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hon. Jerome B. Simandle

OPINION

Table of Contents

I. Introduction............................................4

II. Background..............................................5

III. Standard of Review.....................................11

IV. The DCA Defendants' Motion to Dismiss..................14

A. The Parties Arguments.............................14

B. Analysis..........................................22

1. Eleventh Amendment Immunity..................22

2. Qualified Immunity on Counts XI and XII......27

3. Tort and Contract Claims.....................34

4. Title VI Claims..............................38

5. Remaining Federal Claims in Counts X and XII.40

6. Opposition of the Roizman Defendants.........43

C. Conclusion as to the DCA Defendants...............44

V. New Jersey Housing and Mortgage Financing Agency's Motion

to Dismiss.............................................46

A. The Parties' Arguments............................46

B. Analysis..........................................48

1. Sovereign Immunity...........................48

2. Tort and Contract Claims.....................50

3. Title VI Claims..............................50

4. Opposition of the Roizman Defendants.........52

C. Conclusion as to the NJHMFA.......................52

VI. CRA Defendants' Motion to Dismiss......................53

A. The Parties' Arguments............................55

B. Analysis..........................................56

1. Tort Claims..................................56

2. Remaining Federal Claims.....................57

3. Opposition of the Roizman Defendants.........59

C. Conclusion as to the CRA Defendants...............59

VII. Federal Defendants' Motion to Dismiss..................60

A. The Parties' Arguments............................61

B. Analysis..........................................63

1. Sovereign Immunity...........................63

2. Tort Claims..................................64

3. Remaining Federal Claims.....................67

4. Bivens Claim against Defendant Thumar........67

C. Conclusion as to the Federal Defendants...........72

VIII. Defendant Susan Bass-Levin's Motion to Dismiss........73

A. The Parties' Arguments............................74

B. Analysis..........................................75

1. Tort Claims..................................75

2. Federal Claims...............................79

C. Conclusion as to Defendant Susan Bass-Levin in Individual Capacity...............................80

IX. Conclusion.............................................81

SIMANDLE, Chief Judge:

I. INTRODUCTION

This matter is before the Court on six motions to dismiss filed by several groups of defendants. The first motion to dismiss was filed by Defendants Daniel Esochanghi, Annetta McCormick, Charles A. Richman, and the State of New Jersey Department of Community Affairs Division ("DCA Defendants"). [Docket Item 99.] The second motion to dismiss was filed by the United States Department of Housing and Urban Development and the United States of America ("Federal Defendants"). [Docket Item 100.] The third motion to dismiss was filed by the State of New Jersey Housing and Mortgage Finance Agency ("NJHMFA"). [Docket Item 101.] The fourth motion to dismiss was filed by the City of Camden Redevelopment Agency and Olivette Simpson ("CRA Defendants"). [Docket Item 102.] The fifth motion to dismiss was filed by Lori Grifa and Susan Bass Levin, as they are sued in their individual and official capacities as former DCA Commissioners. [Docket Item 150.] The final motion to dismiss was filed by Defendant Susan Bass Levin in her individual capacity as President and CEO of the Cooper Foundation. [Docket Item 151.]

The Plaintiffs filed opposition to all the motions to dismiss. Defendants Kathy Hvasta, Camden Townhouse Associates, II, L.P., Israel Roizman, Roizman Development, Inc., William L. Cooney, S.H.N.I.R. Apartment Management Corp. and Melissa Jackson-Deeble ("Roizman Defendants") filed opposition to the motions to dismiss filed by the DCA Defendants, the CRA Defendants and the NJHMFA.

For the reasons discussed herein, the court will grant all six motions to dismiss.

II. BACKGROUND

The Plaintiffs filed their initial complaint on January 18, 2011. [Docket Item 1.] The Plaintiffs then filed their first amended complaint on February 15, 2011. [Docket Item 6.] In response, the Federal Defendants, the DCA Defendants and NJHMFA filed dispositive motions to dismiss the first amended complaint. [Docket Items 51, 52, 53.] The Plaintiffs then filed a motion to stay disposition of these dispositive motions [Docket Item 62] and were subsequently granted leave to file the Second Amended Complaint. [Docket Item 69.] The Plaintiffs filed their Second Amended Complaint on June 29, 2011 [Docket Item 73] and the court dismissed the dispositive motions as moot without prejudice to renewal in light of the Plaintiffs' amended pleading. [Docket Item 76.] The instant motions to dismiss the Second Amended Complaint were filed.

The Second Amended Complaint is brought by 16 named Plaintiffs who are low-income African American and Hispanic women who allege that they are present and/or former tenants at Camden Townhouses II Broadway Street. (Sec. Am. Compl. ¶¶ 15-30.) The Second Amended Complaint names numerous defendants including the Roizman Defendants; the DCA Defendants; NJHMFA; the City of Camden and Edward Williams as Director of Development and planning; the CRA Defendants; and the Federal Defendants. (Sec. Am. Compl. ¶¶ 34-49; 52-53; 55-59.)

The Second Amended Complaint asserts the Roizman Defendants were involved in low-income housing development. (Sec. Am. Compl. ¶¶ 4, 35, 38, 40.) In November 1992, the Camden Redevelopment Agency ("CRA") sold 65 tracts of land and improvements to one of Roizman's businesses - Camden Townhouses Associates II, L.P. - for one hundred seventy-five thousand dollars ($175,000), and an additional forty thousand dollars ($40,000) administrative fee. (Sec. Am. Compl. ¶ 62.) Camden Townhouses Associates II also entered into an agreement that these 65 tracts of land were to be developed into 91 affordable rental housing units. (Sec. Am. Compl. ¶ 63.)

Contemporaneously, Roizman, through Camden Townhouses Associates II, L.P., acquired a loan from the New Jersey Housing Mortgage and Financing Agency ("NJHMFA") and entered into a Financing, Deed Restriction and Regulatory Agreement with the NJHMFA which stated:

It is understood by the parties hereto that after a term of fifteen (15) years from the end of the Construction Period it is the Owner's intent to sell the Project rental units to Low-Income Persons. In the event of such a sale, the Owner Hereby represents, warrants and covenants that the Project rental units will be initially offered for sale for the sum of One Dollar (U.S. $1.00) to the existing Low-Income Tenants who meet the income requirements of Low-Income Persons. (Sec. Am. Compl. ¶ 74.) On July 15, 1994, NJHMFA and Camden Townhouses Associates II, L.P. recorded a Deed of Easement and Restrictive Covenant for Extended Low-Income Occupancy which provided:

This Deed of Easement and Restrictive Covenant shall constitute an agreement between HMFA and the Owner and is enforceable in the courts of the State of New Jersey by HMFA or by an individual or individuals whether prospective, present or former occupants of the Building, who meet the low-income eligibility standards applicable in the Building under Section 42(g) of the Tax Code, said individual(s) being beneficiaries of the agreement which is expressed herein between the HMFA and the Owner. (Sec. Am. Compl. ¶ 75.)

Both agreements were recorded. (Sec. Am. Compl. ¶¶ 74, 75.) The units at the Camden Townhouses Broadway II development were then occupied by the Plaintiffs who are low-income, African American and Hispanic females. The Plaintiffs received Section Housing Vouchers pursuant to 42 U.S.C. § 1437f(o) which provided the Plaintiffs with rental assistance while living at the Camden Townhouses Broadway II development. These housing vouchers were administered through the New Jersey Department of Community Affairs ("DCA"). (Sec. Am. Compl. ¶ 48.)

As a matter of legal argument, the Plaintiffs contend that as soon as they became tenants at the Camden Townhouses II Broadway Street Housing Development, "they became either direct parties to the contract or third-party beneficiaries to the contract between Roizman, Roizman Developments, Inc. and its affiliated companies and NJHMFA." (Sec. Am. Compl. ¶¶ 105-107; 123-126.)

Plaintiffs also allege that in 2010, the DCA unilaterally modified the terms of Plaintiffs' annual Section 8 housing vouchers. (Sec. Am. Compl. ¶¶ 108-113; 169.) The Plaintiffs allege they were told by the DCA that they no longer met the Section 8 guidelines for occupancy at Camden Townhouses II Broadway. The Plaintiffs allege they were "unlawfully steered" by the DCA Defendants and Roizman Defendants to other, less desirable rental units. (Sec. Am. Compl. ¶¶ 116, 118, 120-121, 170, 173, 179-184.) Plaintiff Bethea who remained as a resident in the Camden Townhouses II Broadway development tendered $1 to the Roizman Defendants but were never tendered title to her housing unit. (Sec. Am. Compl. ¶¶ 123m 126, 238.) Plaintiff Bethea was later evicted for failure to pay rent. (Sec. Am. Compl. ¶¶ 127-143).

The Plaintiffs ultimately brought the instant action and the following defendants are named in the Second Amended Complaint:

! Israel Roizman ("Roizman Defendants")

- Kathy Hvasta, Manager, Camden Townhouses Associates, II, L.P.

- William L. Coney, Manager Camden Townhouses Associates, II, L.P.

- Melissa Jackson-Deeble, Tenants Accounts Assistant Coordinator, S.H.N.I.R. Apartment Management Corp.

("DCA Defendants")

" Charles A. Richman, Acting Commissioner " Lori Grifa, Former Commissioner " Susan Bass-Levin, Former Commissioner " Joseph V. Doria, Jr., Former Commissioner " Annetta McCormick, Field Office Supervisor " Daniel Esochanghi, Employee " Kia Turner, Employee ! State of New Jersey Housing and Mortgage Finance

Agency ("NJHMFA") ! City of Camden

Planning ! Camden Redevelopment Agency ("CRA Defendants")

" Roizman Development, Inc.

" Camden Townhouses Associates II, L.P.

" S.H.N.I.R. Apartment Management Corp.

! State of New Jersey Department of Community Affairs

" Edward Williams, Director of Development and

" Olivette Simpson, Director of Housing ! United States Department of Housing and Urban

Development ("Federal Defendants")

" Balu Thumar, Acting Director of Public Housing

The Plaintiffs allege that as a result of the denial of their alleged right to purchase their low-income housing units for one dollar ($1), the named defendants violated a multitude of Plaintiffs' federal civil and constitutional rights as well as committed a number of state law violations against them.

The Second Amended Complaint brings the following causes of action:

Count I: Tortious Interference with Contract against All Defendants; and Count II: Breach of Contract against All Defendants; and Count III: Unjust Enrichment against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., the DCA, NJHMFA and City of Camden; and Count IV: Fraudulent and Deceptive Trade Practices against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., the DCA, NJHMFA and City of Camden; and Count V: Specific Performance as to Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., and NJHMFA; and Count VI: Negligence against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., and S.H.N.I.R.; and Count VII: Violation of N.J.S.A. 54:4-6.1, et seq. against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., and S.H.N.I.R.; and Count VIII: Intentional Infliction of Emotional Distress against All Defendants; and Count IX: Unfair Debt Collection Practices against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., S.H.N.I.R., Hvasta, Coney, and Jackson-Deeble; and Count X: Fraud and Deceptive Business Practices against Roizman, Roizman Development, Inc., Camden Townhouses Associates II, L.P., S.H.N.I.R., Hvasta, Coney, Jackson-Deeble, McCormick, Esochanghi and NJDCA; and Count XI: Violations of constitutional amendments, civil rights and other federal laws against All Defendants; and Count XII: Conspiracy under the color of state law to violate Plaintiffs' constitutional rights, civil rights and other rights against All Defendants; and finally Count XIII: Bivens claim against Thumar and Jane and John Does.

The DCA Defendants, NJHMFA, CRA Defendants, Federal Defendants and Defendants Olivette Simpson and Susan Bass-Levin have filed the instant motions to dismiss the counts against them in the Second Amended Complaint in their entirety.

III. Standard of Review

A motion to dismiss for lack of subject matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1) which is filed prior to answering the complaint is considered a "facial challenge" to the court's subject matter jurisdiction. Cardio-Med. Assocs. v. Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d. Cir. 1983). In deciding a Rule 12(b)(1) motion to dismiss, the court must "review only whether the allegations on the face of the complaint, taken as true, allege facts sufficient to invoke the jurisdiction of the district court." Licata v. U.S. Postal Serv., 33 F.3d 259, 260 (3d Cir. 1994).

In deciding the Defendants' motion to dismiss for failure to state a claim upon which relief may be granted pursuant to Fed. R. Civ. P. 12(b)(6), the Court must look to the face of the complaint -- and undisputedly authentic underlying documents --and decide, taking all of the allegations of fact as true and construing them in a light most favorable to the Plaintiffs, whether their allegations state any legal claim, and "determine whether, under any reasonable reading of the complaint, the plaintiff is entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (citing Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)); see Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990). For Plaintiffs to proceed with their claims, the complaint must contain "sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009).

In accord with Fed. R. Civ. P. 8(a)(2), a pleading that states a claim for relief need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Thus, a plaintiff is obligated to "provide the 'grounds' of his 'entitle[ment] to relief,'" which requires more than "labels and conclusions," but he is not required to lay out "detailed factual allegations." Twombly, 550 U.S. at 555 (quoting Papasan v. Allain, 478 U.S. 265, 286 (1986)).

Therefore, a complaint must contain facially plausible claims, that is, a plaintiff must "plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Twombly, 550 U.S. at 556.

Following the Supreme Court precedent in Iqbal, the Third Circuit Court of Appeals in Fowler instructs district courts to conduct a two-part analysis when presented with a motion to dismiss for failure to state a claim upon which relief may be granted. Fowler, 578 F.3d at 210-11 (citations omitted). The analysis should be conducted as follows:

(1) the Court should separate the factual and legal elements of a claim, and the Court must accept all of the complaint's well-pleaded facts as true, but may disregard any legal conclusions; and (2) the Court must then determine whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief, so the complaint must contain allegations beyond plaintiff's entitlement to relief. A plaintiff shows entitlement by using the facts in his complaint.

Id.

The Court independently considers whether the alleged claims are sufficient to survive Defendants' motion to dismiss, and draws on its judicial experience and common sense when conducting this context-specific inquiry. See Twombly, 550 U.S. at 556 (holding that a reviewing court's inquiry necessitates that a court draw on its judicial experience and common sense).

Only the allegations in the complaint, matters of public record, orders, and exhibits attached to the complaint are taken into consideration. Chester County Intermediate Unit v. Pennsylvania Blue Shield, 896 F.2d 808, 812 (3d Cir. 1990). Additionally, without converting this motion to a motion to summary judgment, the "court may consider an undisputedly authentic document . . . if the plaintiff's claims are based on the document." Pension Ben. Guar. Corp. v. White Consol. Industries, Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). "To resolve a 12(b)(6) motion, a court may properly look at public records, including judicial proceedings, in addition to the allegations in the complaint." Southern Cross Overseas Agencies, Inc. v. Wah Kwong Shipping Group, Ltd., 181 F.3d 410, 426-427 (3d Cir. 1999).

IV. The DCA Defendants' Motion to Dismiss

A. The Parties' Arguments

Defendants Daniel Esochanghi, Annetta McCormick, Charles A. Richman, and the State of New Jersey Department of Community Affairs Division filed the first motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6) [Docket Item 99] and this motion was later joined by Defendants Lori Grifa and Susan Bass-Levin [Docket Item 150] (collectively "DCA Defendants").*fn1 The Second Amended Complaint alleges the following eight counts against the DCA Defendants: tortious interference with contract (Count I); breach of contract (Count II); unjust enrichment (Count III); fraudulent and deceptive trade practices (Count IV); intentional infliction of emotional distress (Count VIII); fraud and deceptive business practices (Count X); violations of constitutional ...


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