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Smith v. Hillside Village

United States District Court, D. New Jersey

January 26, 2018

SANDRA SMITH, Plaintiff,



         This motion to dismiss a counterclaim and strike affirmative defenses arises from defendant Hillside Village's aggressive litigation posture with respect to its elderly, disabled tenant of 51 years, plaintiff Sandra Smith. In a prior Opinion ("Op.", ECF no. 10) denying Hillside's motion to dismiss, I summarized the background and procedural history of the case. As I write for the parties, familiarity with that Opinion is assumed.

         Ms. Smith, 78 years old, moved into her rent-controlled apartment at Hillside Village 51 years ago. At some time, she became depressed and developed hoarding disorder, a recognized mental disorder. As a result her apartment became extremely cluttered. Hillside, Ms. Smith's landlord, discovered that conditions in Ms. Smith's apartment had deteriorated to a shocking degree. Ms. Smith was immediately removed from the apartment.

         In July 2015, in state court, Hillside filed an action under the wrong statute, New Jersey's Unlawful Detainer Act. This action was referred to in my prior Opinion as the Detainer Matter [Hillside Village v. Sandra Smith, Docket no. DC-10607-15 ( N.J.Super. Ct., Law Div., Special Civil Part, Bergen Co).) Hillside initially (and incorrectly) sought eviction of Ms. Smith and possession on three days' notice.

         Procedural confusion ensued. Judge Rosa, improvising, directed Hillside to file a landlord-tenant action (the LT Matter), a summary proceeding, in which possession issues would be heard. He dismissed the invalid claim under the Unlawful Detainer statute, but kept the Detainer Matter open for the purpose of later hearing Hillside's claims for damages. Both cases were tried- the LT matter quickly, and the Detainer Matter later. On the LT Matter, Hillside prevailed at trial, but on appeal, the Appellate Division reversed the judgment of possession in Hillside's favor and stated that it "expected" Hillside would repair the apartment and restore Smith's tenancy "promptly." Hillside did not, however, repair the apartment or restore Smith's tenancy. After a trial of damages claims in die Detainer Matter, judgment was entered against Hillside, with prejudice, for failure of proof on the issue of damages.

         Smith filed this federal court Complaint, seeking possession of the premises and damages. One claim, under the Fair Housing Act Amendments ("FHA"), is primarily based on Hillside's refusal to accede to Smith's August 2015 proposal for a reasonable accommodation of her mental disability, consisting of mental health treatment and an agreement for monitoring of her apartment by an outside agency. A second claim is based on the New Jersey Law Against Discrimination ("NJLAD").

         Hillside's Answer (ECF no. 12) asserts some twenty-eight affirmative defenses. (Affirmative Defenses, ECF no. 12 at 8-12) It also asserts a Counterclaim. The Counterclaim seeks to hold Ms. Smith liable in damages for breach of the Lease Agreement, based on damage to the apartment. It also asserts that Ms. Smith must "indemnify" Hillside for "any and all sums which [Hillside] may be required to [sic] in this action, together with attorneys' fees and costs." (Counterclaim, ECF no. 12 at 12-13)

         Smith has filed a motion to dismiss the Counterclaim and to strike Hillside's Affirmative Defenses. (ECF no. 15) Hillside has filed responses (ECF nos. 19, 21), and Smith has filed Replies (ECF nos. 22, 24). For the reasons stated herein, the motion to dismiss the Counterclaim is granted, but the motion to strike Affirmative Defenses is denied.

         I. Motion to Dismiss Counterclaim

         A. Res judicata and the claim for breach of the lease

         1. Applicable standard

         Smith has moved to dismiss the Counterclaim for failure to state a claim, pursuant to Fed.R.Civ.P. 12(b)(6). Rule 12(b)(6) provides for the dismissal of a complaint, in whole or in part, if it fails to state a claim upon which relief can be granted. The defendant, as the moving party, bears the burden of showing that no claim has been stated. Hedges v. United States, 404 F.3d 744, 750 (3d Cir. 2005). In deciding a Rule 12(b)(6) motion, a court must take the allegations of the complaint as true and draw reasonable inferences in the light most favorable to the plaintiff. Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (traditional "reasonable inferences" principle not undermined by Twombly, see infra).

         Federal Rule of Civil Procedure 8(a) does not require that a complaint contain detailed factual allegations. Nevertheless, "a plaintiffs obligation to provide the 'grounds' of his 'entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." BellAtl Corp. v. Twombly, 550 U.S. 544, 555 (2007). Thus, the complaint's factual allegations must be sufficient to raise a plaintiffs right to relief above a speculative level, so that a claim is "plausible on its face." Id. at 570; see also Umland v. PLANCO Fin. Serv., Inc., 542 F.3d 59, 64 (3d Cir. 2008). That facial-plausibility standard is met "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Twombly, 550 U.S. at 556). While "[t]he plausibility standard is not akin to a 'probability requirement'... it asks for more than a sheer possibility." Iqbal, 556 U.S. at 678.

         2. Analysis

         The Counterclaim seeks damages based on breach of the Lease. Essentially, the claim is that Ms. Smith, by allowing conditions to deteriorate in the apartment, breached the conditions of the Lease and exposed Hillside to the substantial cost of cleaning and repairs. Smith's motion asserts that this claim is barred by res judicata, because Hillside pursued a similar claim for damages in the state court Detainer Matter but lost at trial. Hillside responds that the damages claim in the Detainer Matter and the breach-of-lease Counterclaim are "separate causes of action under which the principles of res judicata do not apply." (Hillside Brf. 5, ECF no. 21)

         a. Matters properly considered on 12(b)(6) motion

         First, a preliminary issue as to what is properly before the Court on this motion.

         Hillside contends that because the basis for a res judicata defense does not appear on the face of the Counterclaim, it cannot be the basis of a motion to dismiss under Rule 12(b). It is true that res judicata, an affirmative defense, often raises issues of fact. In a proper case, however, it may be cognizable on a motion to dismiss:

We held in Bethel v. Jendoco Constr. Corp., 570 F.2d 1168, 1174 (3d Cir. 1978), that if a statute of limitations "bar is not apparent on the face of the complaint, then it may not afford the basis for a dismissal of the complaint under Rule 12(b)(6)." This holding applies not only to a statute of limitations defense, but also to any affirmative defense raised pursuant to Rule 8(c), including res judicata and the Entire Controversy Doctrine.

Rycoline Products, Inc. v. C & W Unlimited, 109 F.3d 883, 886 (3d Cir. 1997). Thus res judicata may be considered on a Rule 12(b)(6) motion, where, as here, the necessary facts are "apparent on the face of the face of the complaint" and other documents properly considered on a motion to dismiss.

         In support of her motion, Smith attaches and cites to public records, consisting of judicial decisions in the Detainer Action brought against Smith by Hillside:

1) Transcript of Court's oral decision, Jan. 6, 2016 ("Oral Decision"), ECF no. 15-2 at 4;
2) Disposition Form, Jan. 6, 2016 ("Disposition Form"), ECF no. 15-2 at 14;
3) Letter Decision, Jan.28, 2016 ("Letter Decision"), ECF no. 15-2 at 18.

         These records reflect the state court's disposition of what, in the prior Opinion, I designated "The Detainer Matter-Phase 2." (Op. 7-8)

         While a court considering a Rule 12(b)(6) motion is generally confined to the allegations of the complaint, there are exceptions to that rule:

"Although phrased in relatively strict terms, we have declined to interpret this rule narrowly. In deciding motions under Rule 12(b)(6), courts may consider "documents] integral to or explicitly relied upon in the complaint, " In re Burlington Coat Factory Sec. Litig.,114 F.3d 1410, 1426 (3d Cir. 1997) (emphasis in original), or any "undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiffs claims are based on the ...

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