Iowa City Apartments Downtown lawsuit may go class-action

BY BRIAN ALBERT | JULY 27, 2011 7:20 AM

Ben West/The Daily Iowan
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An ex-tenant's lawsuit against Apartments Downtown Inc., may still be argued in district court.

The possibility follows a Tuesday hearing, in which attorneys from both sides made their claims and counterclaims on whether the case qualifies for class-action status.

The suit, originally filed in December 2010, alleges that numerous facets of the company's current and previous leases contain illegal clauses.

"The case is perfect for the class-action vehicle," said Christopher Warnock, the attorney representing four plaintiffs, before an audience of approximately 15. "Many of the tenants are University of Iowa students, they're inexperienced, they're young, and they don't often know their rights."

If argued in small-claims court, each case would be handled individually.

To be deemed a class-action case, there must be at least 40 members of the class with claims totaling more than $5,000, and all members must be wronged in an identical manner.

Though no tenant faced charges of more than $5,000, Warnock argued precedent shows any number of individuals who were identically wronged can pool their charges, thus pushing the total "well beyond" the threshold.

He said the tenants were wronged because they all signed the same illegal contract — whether the illegalities were willful and enforced or not.

Specifically, he cited four indemnity clauses that free the landlord from paying for certain types of damages.

"If you look into state statutes, it says very clearly that indemnity clauses are not allowed," Warnock said. "Well, they've got four indemnity clauses blatantly right in their lease, though they say there are none."

James Affeldt, an attorney with the Elderkin and Pirnie law firm in Cedar Rapids and the legal representative of Apartments Downtown, argued the issue is actually about whether the clauses were willfully and knowingly written into the leases — something he said Warnock failed to prove.

"They were not forced to sign," Affeldt said. "No tenant is saying they didn't read it. No tenant is saying they didn't understand. These cases can be taken care of in small-claims court, and that's where it should go."

After two hours of presentations, the judge said there was not enough information to make a decision either way, recommending the case continue with a declaratory judgment.

Attorneys with each side of the case will meet on their own to discuss the best way to continue with the case before reconvening before a judge.

Warnock said he was happy with the judge's decision.

"If this declaratory judgment deems the Apartments Downtown leases to be illegal, we're looking at a great chance of moving this forward into class-action territory," he said.

A declaratory judgment will determine if an active contract — in this case the Apartments Downtown leases — are legal.

The plaintiff's other issues include charges for common-area damage and automatic cleaning charges — something spectators in the room said they were familiar with.

Christopher Copeland, a 23-year-old UI graduate, said he came to watch because he lost $500 of a $1,450 deposit. He supports the case.

"There was a crack in my door's lockplate," Copeland said. "They billed me more than $250. That's technically public area, so it's an illegal charge. Who knows what they'll bill me for this time?"

One UI student's mother, Kris Albert, said daughter Mara was also on the receiving end of an egregious billing charge — which drew her to the hearing.

"Apartments Downtown says if damage is done in a common area and they can't find out who did it, the tenants will be billed for it," Albert said. "Well, my daughter — I know it wasn't smart — confronted an intruder who broke down her door and got his ID. She went to the police and the landlords with this information, and she still got charged."

Warnock said though he hasn't met a single student happy with her or his Apartments Downtown experience, he said his goal isn't to put it out of business.

"We're not seeking a million-dollar settlement or something like that," he said. "We just want these landlords to change their business practices and follow the law. It's that simple."

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