Facts

Adam Abelkop and Katherine G. MacDonald were tenants from September 1, 2016, to August 31, 2017, under a written lease for apartment Number 2315 of the "Central Park at Whisman Station" multi-unit apartment complex located at 100 North Whisman Road in the City of Mountain View, California, which was owned by Sobrato Organization, LLC, SI VI, LLC, and Alliance Communities, Inc. In total, Sobrato Organization, LLC, SI VI, LLC, and Alliance Communities, Inc. operated 12 residential apartment complexes, including 599 Castro, Bridgepoint, City Place, Domicilio, Elements, The Montecito, La Terraza, Mosiac Apts, Naya, Tamarind Square, and The Standard. On September 23, 2019, Abelkop and MacDonald brought a consumer class action on behalf of themselves and others similarly situated against Sobrato Organization, LLC, SI VI, LLC, and Alliance Communities, Inc. in the Superior Court of the State of California, County of Santa Clara. The class included former and present tenants of Sobrato's apartment units in California from September 23, 2015, through December 31, 2020, who entrusted a security deposit to Sobrato and did not receive a full refund of their security deposit.

PLAINTIFF'S CONTENTIONS: Plaintiff alleged that defendant failed to timely or properly return their security deposit under their lease and engaged in a fraudulent scheme to retain securities deposits and knowingly and intentionally made false allegations of damage to rental units in an effort to shift the burden of ordinary wear and tear from Sobrato onto their tenants without regard for the condition of the apartment. Further, plaintiffs contended that as a result of defendants' illegal conduct, fraudulently deprived the former and current tenants of the financial means to acquire comparable alternate housing should they decide to move and gained an unfair advantage over law-abiding competitors who provide rental housing, which constituted an ongoing threat and deterrent to current tenants. Moreover, plaintiffs maintained that defendants retaliated against and resisted complaining tenants' efforts to recover their security deposits by threatening and initiating collection actions, which succeeded in deterring most if not all of the plaintiffs from contesting defendants' arbitrary and fraudulent behavior and has resulted in defendants' retaining plaintiffs' money to which defendants were not entitled. Plaintiffs alleged that defendants fraudulently represented to each plaintiff both in words and in conduct that they would return the security deposits even though they knew that they had no intention to return the deposits and that plaintiffs reasonably relied upon the representations when they entered into the rental agreements. Finally, plaintiffs argued that the knowing conduct of defendants constituted an unfair, unlawful, or fraudulent business practice in violation of California's Business and Professions Code.

DEFENDANTS' CONTENTIONS: Defendants denied all contentions.

Result

The case settled for $1 million.