Alcaraz v. KMF Oakland LLC

Background

Bernardo Alcaraz alleged that KMF Oakland LLC and Klingbeil Capital Management, Ltd. discriminated against him because of his race, color, ancestry, and/or national origin. He alleged that employees associated with the property treated him in a hostile and discriminatory manner, mishandled his rent payments, and pursued unlawful detainer proceedings against him. He also alleged that defendants refused to sell him the residence he occupied.

The operative third amended complaint asserted four claims: housing discrimination under the federal Fair Housing Act; race discrimination under California’s Fair Employment and Housing Act; discrimination under California’s Unruh Civil Rights Act; and violations of California’s Unfair Competition Law.

KMF and Klingbeil moved to dismiss all four claims under Federal Rule of Civil Procedure 12(b)(6), primarily arguing that the claims were barred by statutes of limitations. They also argued that the amended claims, particularly those against Klingbeil, did not relate back to the original complaint and that the Fair Housing Act claim was barred by claim preclusion based on the earlier unlawful detainer case.

Relation Back

The court held that the third amended complaint related back to the original complaint’s filing date of May 11, 2018. Under Federal Rule of Civil Procedure 15(c), an amendment may relate back when it arises from the same conduct described in the original pleading and, when adding a party, the new party received adequate notice, would not be prejudiced, and knew or should have known that it would have been sued but for a mistake about the proper party’s identity.

The court found that the amended claims arose from the same alleged discriminatory conduct described in the original complaint. It also found that Klingbeil plausibly had notice of the original suit, would not suffer identified prejudice, and reasonably should have understood that Alcaraz intended to sue it as well as KMF. The court therefore used May 11, 2018, as the filing date for the amended claims and the claims against Klingbeil.

Individual Claims

For the Fair Housing Act claim, the court found that the claim was not time-barred. The court applied the rule that a housing-discrimination claim may be timely when it challenges an ongoing discriminatory practice that continued into the limitations period. Alcaraz alleged a series of events involving rent payments and eviction proceedings that culminated in an August 1, 2016 judgment. The court also rejected the defendants’ arguments based on laches and claim preclusion. It explained that the unlawful detainer case focused on possession based on alleged unpaid rent, while this lawsuit concerned alleged discriminatory harassment and attempts to evict Alcaraz because of his Mexican or Hispanic race, color, national origin, and/or ancestry.

For the California Fair Employment and Housing Act claim, the court applied the two-year limitations period for housing discrimination rather than the one-year period for employment discrimination. The court found that the claim was timely because it related back to May 11, 2018, and because the alleged discriminatory conduct and eviction proceedings fell within the relevant period.

For the Unruh Civil Rights Act claim, the court did not decide whether a two-year or three-year limitations period applied. It held that the claim was timely even under the shorter two-year period because the alleged eviction action began in March 2016 and proceeded to judgment on August 1, 2016.

For the Unfair Competition Law claim, the court applied the four-year limitations period and found that the claim was not time-barred. The complaint alleged relevant conduct during 2015 and 2016, including the alleged refusal to process rent checks and the unlawful detainer action.

Disposition

The court denied KMF and Klingbeil’s motion to dismiss the third amended complaint. The order did not decide whether Alcaraz would ultimately prevail on his discrimination claims; it decided that the claims should not be dismissed at the pleading stage as untimely or barred by the asserted procedural defenses.