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CHAMBERS v. HOLSTEN MANAGEMENT CORPORATION.

March 24, 2004.

SANDRA ANN CHAMBERS, individually, in her official capacity as president of Sutherland Tenants Council (STC), and on behalf of all others similarly situated in the past, present, and future, ANGELA CHAMBERS, individually and on behalf of all others similarly situated in the past, present, and future, Plaintiffs;
v.
HOLSTEN MANAGEMENT CORPORATION, CENTURY PLACE DEVELOPMENT, HEARTLAND ALLIANCE, CHICAGO CONNECTIONS, TRAVELERS & IMMIGRANTS AID, SID MOHN, PETER HOLSTEN, STEVE JOHNSON, LARRY HOWARD BENJAMIN CLARK and SARAH DART, Defendants



The opinion of the court was delivered by: ROBERT GETTLEMAN, District Judge

MEMORANDUM OPINION AND ORDER

Acting pro se, plaintiffs Sandra Ann Chambers and Angela Chambers, on behalf of themselves and all others similarly situated, filed an amended putative class action complaint against defendants Holsten Management Corporation ("Holsten Management"), Century Place Development ("Century Place"), Heartland Alliance, Chicago Connections, Travelers and Immigrants Aid, Sid Mohn, Peter Holsten, Steve Johnson, Larry Howard, Benjamin Clark, and Sarah Daft. In Count I, plaintiffs allege that defendants violated the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq., through a rent overcharging scheme, as well as "questionable issues concerning the phone and vending machine funds." In Count II, plaintiffs assert that defendants violated the Fair Debt Collection Practices Act (the Page 2 "FDCPA"), 15 U.S.C. § 1692 et seq. The remaining counts allege claims under various state law theories, including violation of the Chicago residential Landlord and Tenant Ordinance (Count III), breach of contract (Count IV), breach of implied warranty of habitability (Count V), violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS §§ 505/1 et seq. (Count VI), common law fraud (Count VII), negligent hiring and supervision (Count VIII), unfair enrichment (Count IX), and intentional infliction of emotional distress (Count X), as well as an additional count seeking injunctive relief (Count XI).

Defendants have moved to dismiss Count I for failure to state a claim under Fed.R.Civ.P. 12(b)(6), as well as for failure to plead fraud with particularity pursuant to Fed, R. Civ. P. 9(b). Defendants also seek dismissal of Count II, arguing that they are not "debt collectors" within the meaning of the FDCPA. For the reasons stated below, the court grants defendants' motion to dismiss Counts I and II, and declines to exercise supplemental jurisdiction over Counts III through XI.

  DISCUSSION

  Plaintiffs are residents of Sutherland Apartments, an apartment complex located in Chicago, Illinois, and managed by defendant Holsten Management. According to the amended complaint, defendants Century Place, Heartland Alliance, Chicago Connection, and Travelers and Immigrants Aid ("TIA") are part — owners of Sutherland Apartments. The individual defendants are all current or former employees of defendants Holsten Management and Century Place: Peter Holsten is the President of Holsten Management, Sid Mohn is the President of Century Place, Steve Johnson oversees the day — to — day operations of Sutherland Apartments, Larry Howard is the former residential property manager/agent for Sutherland Apartments, Page 3 Benjamin Clark is the current residential property manager/agent for Sutherland Apartments, and Sarah Dart is the current assistant residential property manager/agent for Sutherland Apartments.

  Plaintiffs allege that, on February 17, 2002, Howard informed them that the City Trust Fund Subsidy Program was increasing the subsidy it paid to Holsten Management by $25, to $175. Plaintiffs believed that the increased subsidy "logically should have decreased [each of the] Chambers' rent $25.00."

  Between February 21, 2002, and April 9, 2002, plaintiffs exchanged correspondence with Holsten Management in which plaintiffs inquired about "any discrepancy" — presumably, the fact that plaintiffs' portions of their respective rents did not decrease as a result of the increased subsidy from City Trust Fun Subsidy Program. Holsten Management responded that the request for a subsidy increase was made to the City Trust Fund Subsidy Program to allow Holsten Management to "maintain the building while keeping rents affordable for our tenants."

  Plaintiffs maintain that Holsten Management's response is inconsistent with the purpose of the City Trust Fund Subsidy Program. According to the amended complaint, Howard and Dart threatened plaintiffs with eviction if they did not "go along with allowing the landlords (Holsten, Century Place, Heartland, Chicago Connection, TIA), Mohn and P. Holsten to administer the City Trust Fund in this manner." Plaintiffs further allege that they "[were] threatened that if [they] kept complaining about it, [they] would lose [their] City Trust Fund."

  According to the amended complaint, "one or more of the defendants have directly, indirectly, assisted in, and/or have not otherwise stopped the intentional and malicious assessment (charges and/or billings) to past and/or present tenants . . . [and] directly and/or indirectly assessed, attempted to collect, and/or collected excessive rents" from plaintiffs and Page 4 other members of the putative class." The amended complaint alleges that most tenants at Sutherland Apartments are "paying a considerable amount of rent that far exceeds the market — value of their apartments," and that many apartments do not comply with the Chicago building code. According to plaintiffs, to receive a lower rent, "one must either be a friend of Howard, Clark, Dart and Johnson, and/or be sexually involved with or working for `free' for Howard."

  The amended complaint further alleges that the Sutherland Tenant Council has not received its public telephone and vending machine commission checks and that defendants have refused to account for those sums. According to plaintiffs, Clark directed a member of the maintenance staff to remove the security chain from the vending machines, and then demanded removal of the machines and prevented them from being refilled. Plaintiffs allege that another tenant has been permitted to operate her vending machines, notwithstanding the fact that she has no agreement with the Sutherland Tenants Council.

  According to the amended complaint, Holsten Management has also failed to account for $42,185 that was allegedly allocated for a visitor entry system which has not yet been installed. Plaintiffs further allege that numerous tenants have been charged an "illegal" fifty — dollar air conditioning fee and were never informed of their right to dispute the charge.

  Plaintiffs characterize the foregoing acts as a pattern of racketeering activity with the meaning of 18 U.S.C. § 1961(5) and allege that they have suffered injuries in their business and property as a result, including over — payment of rent, eviction or threatened eviction, as well as loss of employment due to stress. Plaintiffs further allege that defendants' activities violate the FDCPA. Page 5

  ...


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