Perez v. Axis Residential, LLC

Background

Chastity Perez and Kristin Rodenberg sued Axis Residential, LLC under the Minnesota Whistleblower Act. Perez worked as an assistant community director, and Rodenberg worked as a leasing consultant at Affinity at Eagan, an apartment complex managed by Axis. They alleged that they reported suspected theft and other misconduct by their supervisor, Ashley Easton, to Axis management and human resources.

According to the proposed amended complaint, Axis managers discouraged further reports, did not disclose the investigation’s results, and fired both plaintiffs on July 18, 2023. The plaintiffs alleged that Axis terminated them in retaliation for reporting suspected unlawful conduct and to conceal additional corporate mismanagement.

Motion to Amend

The plaintiffs moved under Federal Rule of Civil Procedure 15 to amend their complaint to add a request for punitive damages. Axis opposed the motion based on futility and bad faith. An amendment is futile if it could not survive a motion to dismiss for failure to state a legally sufficient claim.

The court explained that Rule 15 governs the procedure for amending a federal complaint to add punitive damages. Minnesota law supplies the substantive standard for punitive damages. Under Minnesota Statute § 549.20, the plaintiffs had to plausibly allege that Axis acted with “deliberate disregard” for their rights—that is, that Axis knew facts creating a high probability of injury to their rights and intentionally disregarded or acted indifferently to that risk.

Court’s Analysis

The court found that the proposed complaint plausibly alleged Axis’s knowledge of facts creating a high probability of injury to the plaintiffs’ rights. Those allegations included Axis’s knowledge of the attempted reports, the reports to human resources, the evidence supplied during the investigation, the plaintiffs’ strong work records, and the fact that the plaintiffs were not responsible for Affinity’s declining occupancy.

The court also found that the allegations plausibly showed deliberate disregard. The proposed complaint alleged that a manager refused to meet with Rodenberg about the suspected theft, told Easton about Rodenberg’s attempted report, discouraged additional reports, and said the plaintiffs were “wasting their time.” It further alleged that Axis fired the plaintiffs shortly after the investigation ended and after they raised concerns about retaliation.

Axis argued that the motion was brought in bad faith because the plaintiffs had not supported it with evidence. The court rejected that argument, explaining that evidence was not required at this stage.

Disposition

The court held that the proposed amended complaint plausibly alleged that Axis acted with deliberate disregard for the plaintiffs’ rights under the Minnesota Whistleblower Act. Judge John F. Docherty granted the plaintiffs’ Motion to Amend Complaint. The plaintiffs were ordered to file the amended complaint within fourteen days of April 11, 2025.