A Superior Court hearing has been set for the second week in January regarding the nearly $550,000 settlement reached between the former owner and manager of Lake Arbor Apartments and tenants.
About 100 former tenants of the west Charlotte complex will share in the settlement if approved by the court. In a class action lawsuit, the tenants claimed that complex managers illegally collected rent despite being cited for numerous health and safety violations. They included mold in units, leaky roofs, rodent and roach infestations, broken heating and air conditioning and other appliance and electrical issues.
City officials and housing advocacy groups pressured the owner to fix the problems but last summer, all tenants were abruptly told they had to move so the entire complex could be renovated. Sharon Dove, an attorney with the Charlotte Center for Legal Advocacy and private attorney Julian Wright were part of the tenants’ legal team. They explain why they chose to settle the case this week.
Julian Wright: Settling now allows the members of the punitive class to go ahead and get some money. The ultimate recovery that we were able to obtain here through the settlement is about 1.8 to actual damages, meaning that if a client in a class has actual damages of $100 their recovery in this lawsuit is going to be about $180. And while we would have loved to have continued to litigate and potentially get more for the punitive class members, this is a real recovery and it's money for these folks sooner rather than later.
Gwendolyn Glenn: Sharon?
Sharon Dove: Yes, I agree wholeheartedly with what Julian just said. You never know what the result would be if you continue down the road of litigating. And this was a really, really good offer for our clients and we took it.
Glenn: How does this compare to other cases of this type?
Wright: I think the biggest difference here, Gwendolyn, is that the folks at Lake Arbor were proceeding as a punitive class, as a larger group. I think it would be potentially easier for a landlord to fight with an individual defendant and wear an individual defendant down. But when it's a large class doing it and you're doing it as a collective group, I think it's a much bigger force. And it's something that the landlord in this case ultimately had to take very, very seriously and deal with.
Glenn: Last year, they said that this complex would have to shut down and the people would have to move. And some of them were saying that they didn't have anywhere to go during that time. And now have most of them been able to find housing? Tell me, what has been their situation during that interim?
Wright: That "they" you're referring to were the former landlords? They made the decision that they were going to shutter this place down and kick all these people out.
Glenn: Right.
Dove: So some of the folks were able to relocate. And that includes folks that were able to relocate because they moved in with other relatives in the Charlotte area. Couchsurfing, for instance, I think is an option that many had to resort to. Other folks found apartments.
Glenn: Living on somebody else's couch that does qualify as homeless.
Dove: That's correct.
Glenn: OK, and how are you calculating how much each person will get from this lawsuit?
Wright: North Carolina law prohibits in the Charlotte housing code prohibits the recovery of rent during the time that the conditions that the apartments have dangerous conditions. So any rent that would have been paid during that period of time when the premises should not have been rented out, that rent money is damages and can be calculated and determined based on when the units were inspected and when repairs were finally made and clarified. So depending on how long people had to live in those conditions, that'll determine a significant segment of their damages.
There are also statutory damages in some instances when the landlords and their managers would make efforts to recover the debt or recover the rent that imposes additional statutory penalties. So each time that we're able to establish, for example, through a letter or an email that efforts were made to collect alleged rent owed, then that triggers a statutory penalty that some of the class members also get either one time or a certain number of times, depending on how hard they were pursued by the landlords.
Glenn: Will they get any kind of compensation for, say, for instance, because of mold and that they had to go to the hospital or from medical bills and the stress that that may have caused?
Wright: No, typically those types of claims would be more individualized for each tenant that had to endure them. So they wouldn't be appropriately the subject of a class action litigation like this one. That would be a claim that would have to be litigated on its merits for each individual family that had to suffer through that, it's not something that's generally the same or can be calculated the same across a larger group of people.
Glenn: And looking at this, this was over $500,000 that they have settled with. When you look at large companies or companies that own large apartment complexes like this, does this really send a sign to others? If you do these kinds of similar things, it will hurt you because I guess it doesn't sound like a lot when you think of probably how much money companies like this are making off of tenants.
Dove: I guess the short answer to the question is yes. The amount we were able to get for individual clients are, generally speaking, very, very low. If you walk out with a couple of thousand dollars for your client, you've done very well. This is a large sum and a landlord-tenant case. And it's a clear message to landlords that this type of conduct is not acceptable.
Julian Wright is an attorney with Robinson, Bradshaw & Hinson law firm. Sharon Dove is an immigration and housing attorney with the Charlotte Center for Legal Advocacy.
