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VineBrook Homes fights back against lawsuits calling it a 'predatory' landlord

VineBrook won't be scapegoat for 'the city's own failures'
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Posted at 4:10 PM, May 12, 2023

CINCINNATI — VineBrook Homes is asking a Hamilton County judge to dismiss the City of Cincinnati’s lawsuit against the company, calling it “a broad overreach of government authority” and an attempt to “shake it down for money.”

The city sued VineBrook in January, claiming the company’s “illegal and predatory landlord practices” created a nuisance. The city wants a court-ordered receiver to take control of more than 900 VineBrook rental properties inside city limits. VineBrook argues the city has no evidence to support such a move.

“The city attempts to lay blame on VineBrook for alleged, conjectural and speculative injuries,” said the filing, “essentially using VineBrook as a scapegoat for an array of other issues that impact housing in the community and diverting responsibility for potential issues that may equally arise from the city’s own failures to generate economic growth, improve schools, and support law enforcement to reduce crime.”

The April 28 filing marks an escalation in local court fights over the business practices of VineBrook Homes, a Texas-based institutional investor that owns 3,357 rental properties in Greater Cincinnati, according to its most recent annual report to shareholders.

VineBrook also sought dismissal of a companion complaint that Legal Aid attorneys filed on behalf of Cincinnati tenants. And it recently added a second law firm to defend itself against a proposed class-action lawsuit alleging it violates Ohio’s tenant and landlord law by charging tenants a $10 monthly fee for maintenance expenses.

Keating Muething & Klekamp is defending VineBrook against allegations made by the city and Legal Aid. Ice Miller LLC and the Taft law firm are handling the case against DeBlasis.

“It seems to me that you’ve sort of got a cornered animal now,” said attorney Rick DeBlasis, who is pursuing the class-action case against VineBrook. “They’re not looking to shake hands anymore. They’re looking to self-preservation perhaps, I don’t know.”

DeBlasis has filed two lawsuits against VineBrook since 2021. The first sought class action status on behalf of people whose rental deposits were not fully refunded when they left VineBrook properties. It was rejected by Hamilton County Judge Leslie Ghiz. The second lawsuit, also a proposed class action, alleges the company violates Ohio law with a $10 monthly maintenance fee that regularly appears in VineBrook leases.

Because both lawsuits contain similar allegations, VineBrook argues the 2021 dismissal prevents a new class-action claim against VineBrook. DeBlasis will argue that’s not the case in a May 31 hearing on the motion to dismiss.

“When my son brought me this case, I saw an injustice and that irritates me,” DeBlasis said. “And it’s here in our community. That should irritate a lot of people. Especially those who can’t find a place to live without what they perceive to be an enormous rent for that space.”

Like DeBlasis, the city also sued VineBrook in 2021 after it racked up $213,000 in civil fines for code violations and $391,000 in unpaid water bills, according to court records. That case ended in two months with a $563,000 settlement and VineBrook’s pledge to “cure all building code violations” in 45 days.

“The terms set out in this agreement are a compromise of disputed claims of which the validity, existence and occurrence is expressly denied by the parties,” the settlement agreement stated.

The city’s January lawsuit alleged VineBrook violated the terms of that 2021 settlement, giving the company a chance to remind all parties it never admitted liability.

“This is not the first time the city has tried to hale VineBrook into court to shake it down for money,” said a footnote to VineBrook’s motion to dismiss. “Now, the city is back for another bite at the apple.”

Beyond the rhetoric, VineBrook is raising some legal arguments that might be difficult for the city to overcome.

It cited two Ohio cases where appellate courts rejected city-initiated nuisance claims against banks following the subprime mortgage crisis in 2008. In both cases, cities failed to cite specific examples of how bank policies caused the code violations, blight, crime and other problems alleged by Cincinnati and Cleveland.

In Cincinnati’s 2012 case against Deutsche Bank, the Sixth Circuit Court of Appeals dismissed all claims against three of the five defendants named in the complaint.

“It is not enough for the city to assert that every corporate entity with ‘Deutsche Bank’ in its name engaged in the complained-of business practices or owned some property without some factual allegations that make such a claim plausible,” the ruling said.

VineBrook claims the city gave a similar lack of detail in January’s lawsuit.

“Although the City has repeated ad nauseum the expansive size of VineBrook’s property portfolio, it has only listed 13 properties as actually having code violations,” said the April 28 motion. “Like the records in (the Deutsche Bank case), these records catalog every code violation issued, even properties that may have been long since sold to someone else.”

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