The letter arrived in C.J. Duffey's mailbox late last year, and everything about it seemed wrong.
"Dear Charles Duffy," it began, misspelling his last name. "Following your default from apartment #1204, you have an outstanding balance of $1728.80."
The money was due immediately. "If the amount requested is not paid, your file may be turned over to our attorney for litigation."
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It was signed by Kendra Heintzelman, property supervisor of Centerpoint Apartments, a sprawling complex on Frankford Road in North Dallas. A similar letter arrived in Duffey's ex-wife's mail around the same time.
Neither had ever lived at Centerpoint. But their daughter, Kenya Gilstrap, had. It wasn't especially nice, but it wasn't far from Buttons in Addison, where Gilstrap sometimes performed as a singer. It was cheap: $484 a month. And they let Gilstrap's parents co-sign the lease.
"The apartment requested that we have liability," Duffey recalls. "And I see now that's what they were going after, the people that were co-signing for her."
Duffey lives about 80 miles east, in Sulphur Springs. He is a minister at Color Blind Ministries, a church that prides itself on its diversity. He owns a hospice in town and has a boxing room at the local gym, decorated with pictures from his youth, when he competed as an amateur and pro. He also works as bail bondsman in Hopkins County.
Fighting, in other words, is something he's accustomed to.
"I go to court on a weekly basis, so I know how to behave in court," he says.
He didn't pay the alleged balance. When he got a notice that Centerpoint had, in fact, sued him in Denton County Court, he filed an answer and got a court date. He expected a judge to throw the debt away after he got a chance to explain how it just came out of nowhere. "I thought that this was so cut and dried," he says.
But then he showed up in court and met his match — an apartment complex owned by a family of debt collectors and known for aggressively suing its tenants, in a courtroom whose judge has never ruled against them. He was about to learn the lesson other tenants have when they've moved out, and even before.
"We're kind of afraid to move," explains one Centerpoint resident, "because we heard rumors that when you move out, they fuck you."
Centerpoint is a bloated structure of white and gray brick, on a busy stretch of Frankford Road. It's surrounded by private parking lots that residents say double as a decent place to make a drug deal. It sits next to a commercial parking lot dotted with fast-food chains, a Metro PCS, a Kwick Stop and a pawn shop. The rent is cheap, which keeps the leasing office packed with prospective tenants, many of whom aren't keen on reading or honoring their leases too closely. The resulting lawsuits, which Centerpoint almost always wins, are expensive.
The complex is operated by the Zidell-Susman Co., a Dallas company run by Allan Zidell and Ari Susman. They don't appear to own a lot of other buildings in town, but Zidell does have his hands in another business: a debt collection agency called JSZ Financial, where he's a director. That company, which specializes in collecting property debts, is run by another Zidell, a man named Jeff, and shares an address with Zidell-Susman. (A JSZ secretary said that neither men would comment.)
At Centerpoint, the Zidell tradition appears to be taking tenants to court. The complex has filed more than 700 lawsuits against tenants since 1996, records show, far more than similarly sized buildings. That doesn't include simple eviction cases or the hundreds of times Centerpoint has asked a court to freeze the bank accounts of defendants it's successfully sued.
"I never lost a Centerpoint case," brags Jeffrey Sprigg, an attorney who represented Centerpoint for almost six years at the Suster Law Group, its law firm of choice. "And why is that? Because all of the claims we had were valid."
The courts tend to agree, leaving working-class tenants with bills in the thousands.
Like Duffey, Russell Scott Sawyer never lived at Centerpoint, but he and his ex-wife signed a lease there as a guarantor for their son Troy Durham, court records show. The lease would last from September 3, 2011, until March 31, 2012, and would automatically go month-to-month unless the Sawyers gave notice of their plans to break it 60 days in advance.
Sawyer faxed his 60-day notice to Heintzelman in January 2012, according to the "Notice to Vacate" form he submitted to the court. "Contract will be up 3/31/12 — tenant may choose to sign his own lease and stay in unit," he wrote.
But Heintzelman ignored his notice and continued to call him, Sawyer alleged in a letter to the court. And on March 28, two days before the lease ended, he emailed Centerpoint, stressing that he'd already submitted his notice: "Nothing has changed. We will not be responsible for the bill after March 31, 2012."
The phone calls continued, he told the court, and Durham remained in the apartment under the original lease co-signed by Sawyer. Sawyer filled out yet another "Notice to Vacate" on April 18, 2012 — about a month after the original lease was supposed to end, meaning that he now would be on the hook for the lease until the end of June. That is, if the vacate notice was acknowledged by Centerpoint. This one wasn't either. (Heintzelman claims that Sawyer changed his mind about his son moving out.)
"The phone calls continued from the manager and I was still being harassed by the complex. I asked the complex to quit contacting me but the phone calls continued," Sawyer told the court.
Centerpoint evicted Durham in June, despite his apparent plans to move out by the end of the month. Eight months later, in February of this year, Sawyer got a letter in the mail from Centerpoint's collections manager, Jennifer Reven: "Following your default and move out from the above apartment you have an outstanding balance of $3,341.25." In the letter, Reven warned that "if payment is not received immediately I will instruct our attorney to file a lawsuit against you for this amount."
In fact, Centerpoint had started filing suit months earlier, in November 2012. The bill was for "final utilities, unpaid rent and late fees, eviction court costs, damages beyond normal wear and tear, concession charge back, reletting fee, electric provider fee and writ of possession fee." A judge ruled for Centerpoint, and tacked on $1,050 in attorney's fees.
"I think Mr. Sawyer felt sorry for his kids and he paid the rent for them," Heintzelman said in an interview. "He probably didn't have the money to continue to pay for them because they didn't work."
At least Terra Shepard actually lived at Centerpoint, although not full-time. As a traveling roofer, she used to chase storms, looking for the next big insurance payout. Around 2006, she rented a Centerpoint apartment to have as a crash pad when she visited Texas.
"It was just one problem after another," Shepard says. "Every time I came back in town there was a note on my door saying that I owed them something. None of it ever made much sense to me so I just paid it."
Shepard finally ended the lease in 2011. She says she didn't get a dime of her security deposit back. Then she got a letter in the mail, asking for around $1,200.
"When they sued me, which I thought was just hilarious, I just basically chose to ignore it," she says. Court records show that Centerpoint won a default judgment against Shepard of $931. Months later Centerpoint asked a court to freeze Shepard's bank accounts until she paid up, records show. The case was dismissed. Shepard says she filed for bankruptcy around the time of the lawsuit, preventing Centerpoint from collecting the debt.
Centerpoint's attorney, Israel Suster, says his client wouldn't want to go to court without a solid case. "It costs them time, money and expense," he says. But the residents almost always lose, and end up covering those legal expenses.
"I just paid them everything," says Riley Zollars. She lived at Centerpoint back in 2007, when she was staying in Dallas for an architecture internship. She didn't know she owed Centerpoint money until she left Texas. "When I talked to them on the phone, I don't know who I was talking to from Centerpoint, they were like pretty nasty, and they basically were just like, 'You have no rights, there's no way you're going to win this.' And I really didn't have the means to go to Texas and try to find a lawyer and all that stuff, so I just paid them."
The bill was $3,743.
Sarah Surratt co-signed for her granddaughter to live at Centerpoint around that same time. Then her granddaughter lost her job. They fell behind on rent and were evicted.
Surratt, 80, recalls getting a call from a woman from the complex who sounded mad. She wanted $5,000. "I kept insisting that I was not going to pay her that $5,000," Surratt says. She got off the phone and talked to an attorney, who helped settle the case — for $4,000.
A mother who co-signed for her son in 2007 got caught in Centerpoint's legal crosshairs when the complex evicted him, saying he was a "suspect in a drug investigation," documents show. When he returned to Centerpoint with his mother a final time to try negotiating the money he owed, the cops were there. They arrested him and he spent the night in jail — not for drugs, his mother says, but for traffic tickets he owed but never paid. He was convicted in Denton County of two traffic citations the year prior, but Texas records show no drug charges against him.
Centerpoint accused her son of not just breaching his lease by getting evicted but also for damaging the apartment. The judge sided with Centerpoint, awarding the apartment $2,491.52 — plus another $1,225 in legal fees.
For most property owners, lawsuits aren't a worthy investment, legal experts say; landlords usually just turn debts over to collection agencies. "Suing a tenant is not a very lucrative activity," says David Sadegh, president of the Tenants Council of Houston.
But for Centerpoint, litigation, or the threat of it, appears to be a key weapon in its arsenal. It starts with a letter, like the one Duffey received, threatening a lawsuit if he didn't pay up.
"I am not a certified collector," Heintzelman, the property manager, said in an interview.
"I cannot, say, threaten lawsuits or say some of the things that a licensed collector can. It's against the law. ... I'm limited in what I can ask for."
But in Duffey's' case, that's exactly what she did.
"That is the letter that is given to me to send out," she said. "I didn't write the demand letter, but I have to send it out."
When a lawsuit does get filed, much of a time there isn't even a trial. "We would settle I would say upwards of 30 percent [of cases] prior to going to court," says Sprigg, the former Centerpoint attorney. Other times people ignore the warning letters they get from Centerpoint. Then they get a court order, and they ignore that too. In those cases, Centerpoint wins an easy default judgment, usually at least $1,000 before attorney's fees.
"I think they're very aggressive in pursuing what they think are breaches," says Sharon Campbell, a Dallas-based attorney who has counter-sued Centerpoint on behalf of a client.
Sandy Rollins is the executive director of a nonprofit tenants rights group called the Texas Tenants Union. Whenever someone comes into her office to complain that they've been sued, she says they're usually getting sued by the "Zidell-Suster machine," she says.
The standard apartment lease used by the Texas Apartment Association, the industry's trade group, comes with a lot of fine print. But for most complexes it's not enough. They tack on even more, addendum by addendum. One of the most common is for something called a "rent concession," spun as special discount.
Typically, breaking a contract leaves you only on the hook for the actual damages caused by your change of heart. Contract law typically keeps you from getting charged an extra punitive fine just for breaking the deal.
With rent concessions, landlords have dug themselves a sizable loophole. It works like this: An apartment complex advertises an apartment at a specific price — say, $1,000. But when the tenant goes to sign on the dotted line, an addendum attached to the lease lists the apartment's "market rate" as something higher — say, $1,200.
It's designed to make the tenant think he's getting some sort of deal. But it's actually a way to keep tenants from breaking their leases, and to penalize them if they do. If a tenant beaks the lease early, the "discount" disappears retroactively. So a tenant who paid the advertised $1,000 rent for 11 months — but left a month before his one-year lease was up — would have to pay back the $200 discount for every month he lived there. That's $2,200.
Many of the lawsuits filed by Centerpoint include demands for "concession chargebacks": In Duffey's case, the charges included a $93 concession fee for the last month his daughter lived there. Often it's much more: Nathan Roberts says he wanted to renew but missed his 60-day deadline. Centerpoint kicked him out, he says, and then sued him for $569 in unpaid rent and $780 in repaid discounts. Another tenant, Jim Rhodes, owed $882.
It's a practice tenant-rights advocates say shouldn't stand up in court.
"Rent concession agreements are tricky lawyer tricks," says Robert Doggett, an attorney at the nonprofit Rio Grande Legal Aide. "It's just a total sham where they invent something to try to get around Texas law."
In 2009, Texas state Representative Eddie Rodriguez introduced a bill to ban rent concessions. It failed, which Rodriguez blames on the powerful Texas Apartment Association, which pours hundreds of thousands of dollars into Texas campaign coffers every election cycle. "I think the TAA lobbied really, really hard and talked to enough members to defeat it essentially," Rodriguez says. "Tenants' rights in Texas are not many."
One thing lawmakers did pass that session was a bill preventing co-signers from being held liable for renewal lease agreements they didn't sign. During the debate of the bill on the House floor, a woman named Felicitas Cadena was called as a witness. She told a story about co-signing for a baby sitter in 2005. The apartment complex: Centerpoint.
Cadena thought it was a one-time deal, until Centerpoint filed a lawsuit against her in 2007. It turned out her signature had automatically rolled over to the renewal leases. And the baby sitter was accused of damaging the apartment. "The judge did not question anything, because I had signed this form," Cadenas says, holding an old lease. Cadena owed Centerpoint $3,489 in damages, an additional $3,850 in attorney's fees and an 18 percent post-judgment interest rate, totaling $7,356.
"I will forever remember all my crying on my way home, a feeling of hopelessness," Cadenas said in her testimony.
Concessions aren't the only addendum Centerpoint tenants sign. There's a slew of them: One says the company is not responsible for giving tenants any "written or verbal reminder" about their 60-day notice, even though Suster, the Centerpoint attorney, says 60-day-notice reminders are an industry standard. And if the tenant refuses to sign off on an addendum, he's still on the hook, because another addendum declares that "resident agrees to all addendums and policies provided by Centerpoint whether signed or not."
Should they run afoul of all these agreements, yet another addendum sets the tenants' legal course. "All parties, landlord and resident, agree to mutually waive all rights to a jury trial if litigation is filed." That means almost every Centerpoint case that ends up in court winds up in the hands of the same jurist: Denton County Justice of Peace Patty Larson.
"I think that's a terrible addendum," says Rodriguez, the state rep. "To remove a jury in that situation, what you're really doing is you're removing the peers, you don't want any peers there to hear that case."
Terrible for the tenant, maybe. But for Centerpoint, it always seems to work out.
C.J. Duffey's trial date was a stifling day in late August, at Larson's small courthouse in Carrollton. The Suster Law Group attorney on the case was Kelly Hankey, who waited outside the courtroom with Kendra Heintzelman, the Centerpoint property supervisor. Bonnie Henley, Duffey's ex-wife, paced the lobby. Her daughter, Gilstrap, arrived in a pink dress with bleached blonde streaks in her hair. They didn't bring an attorney. That would be Duffey's job. He ran in wearing a buttoned shirt, a few minutes late.
Larson, who's 65 with closely cropped white hair, seemed helpful at first. "A lot of special rules apply to a justice court case, I want to make sure you understand," she told Duffey.
Speaking slowly, she instructed him on how to conduct a cross-examination of Heintzelman: Ask questions that she can answer, stick to what's in the contract, don't let feelings get involved. "I know that there is a lot of frustration," she assured him. "What we're here for is specific about a contract."
His voice was level as he argued with Heintzelman about whether she called him ahead of time to warn of the charges he supposedly owed: She said she called, Duffey said she didn't. Duffey asked the judge if there was a way to subpoena phone records. (No, Larson said.)
Duffey hesitated between questions, appearing as if he was trying to concentrate on what he should ask next. But he looked, and sounded, calm, even if Larson indicated otherwise. "You're doing very well, stay calm," she said. "You're also a very well-controlled man, and I know you're frustrated but I know you will do this well."
"I knew then I was in a game," Duffey said after the trial. The judge, he felt, "was trying to make herself look justified by saying I was erratic. But I never got, my tone of voice really never changed."
In an interview later, Larson insists she treats each case equally, but records show that while her predecessors at least occasionally found cause to rule against Centerpoint, in 55 trials Larson has yet to side with a tenant.
"I'm not ruling in favor of them, I'm taking the facts and giving them judgment that they have proved up by law," she says. "Whether I like the law or not, I took an oath of office to follow it, and I'm going to follow it as carefully as I possibly can, that's who I am."
Asked to name a trial where Centerpoint accused anyone damaging an apartment and didn't get a judgment, she tells a story about a case in which Centerpoint won but decided to give the money back. "It was legal and everything was legal but the man didn't feel it was right."
Larson's is an elected position, although it's not an especially competitive one. Campaign records show that she received only one donation during the most recent campaign cycle, in 2010 — a $1,000 check from the Apartment Association of Greater Dallas PAC. "We don't have a whole lot of faith of getting justice in the justice of the peace court," says Sandy Rollins, from the Texas Tenants Union.
That's not the case everywhere. The Zidells also own a pair of apartment complexes in Waco, called Saddle Brook and Saddle Brook West. Sung Jang and his wife, Sunmi, rented a Saddle Brook West unit in 2007, after he accepted a professor job at Baylor University. When they saw the unit for the first time, they noticed that the carpet was stained, according to testimonies the Jangs and their friends would later give in court.
A year later, the Jangs were ready to move out. They said that they asked the leasing office about doing a walk-through, but multiple times the staffers told them not to worry about it. Then, after moving out, the Jangs got a letter from Saddle Brook West: They owed $1,452.92. It turned out that the leasing office had found some damages to the apartment during the walk-through.
The Jangs headed to Justice court in Waco — and won. With Sprigg on the case at the time, Saddle Brook West appealed and got a jury trial, even though the Zidells require tenants to waive their rights to juries. But it didn't help: The Jangs won that too. Saddle Brook West appealed again, this time to the Waco 10th Court of Appeals, which also sided with the Jangs. And in August of this year, more than five years since the Jangs lived at Saddle Brook West, the apartment complex appealed the case to the Texas Supreme Court. The appeal is now pending.
Duffey did his best in court, carefully laying out his case for the judge. His daughter, Gilstrap, signed a six-month lease, she says, and turned in a 60-day move-out notice to the leasing office. Then she got a renewal notice in the mail. "I said I'm not doing a renewal, I already sent my 60-day," Gilstrap recalls.
But there was a problem: The woman she'd given the form didn't work in the office, and they had no record of her 60-day notice, she says. She tried talking to Heintzelman about the vanishing notice. "I told her my 60-day was lost. She raised her voice then — I had to back down because really, I couldn't win."
Gilstrap says she was told that if she didn't renew it would wreck her credit. She signed a new three-month lease. She says Heintzelman gave her a lease to take home, with Post-It notes directing her to sign some spots with her own initials and signatures and some parts to put her parents' signatures and initials. Gilstrap says she signed off for her parents, assuming it was fine. "I don't really know the ins and outs of renting, I wish I did," Gilstrap says. (Heintzelman denies saying anything about Gilstrap's credit: "That would never come out of my mouth.")
The second lease didn't actually end after three months, of course: It would continue on a month-to-month basis, indefinitely, until Gilstrap turned in her 60-day notice.
She stayed a few months past, finally moving out in November of 2012. Centerpoint, however, contended in court that she was actually evicted. Records show Centerpoint had begun to file an eviction against her but then failed to follow through with the case — it was dismissed for "want of prosecution," which typically happens when a person who files the suit doesn't show up to the trial.
"There was no payment made in November," Heintzelman said on the witness stand, explaining her basis for the supposed "eviction" against Gilstrap.
They charged her $473, the standard reletting fee for someone who breaks her lease. But there were other charges dropped in, too: $93 in concessions, $72 for unpaid utilities, $181 for eviction costs, $515 for unpaid rent, $170 in cleaning fees and $255 for damaging her carpet and her blinds. In court, Centerpoint provided grainy black and white photos of alleged damage, including the rusty inside of a toilet's water tank.
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They also offered another piece of evidence — a concession addendum that was attached to the second lease signed by Gilstrap, the one she signed her parents' names to. The addendum included Duffey's actual signature, but at a diagonal angle right on top of his wife's signature. He says he doesn't write sideways. He claims it was copied, cut and pasted from somewhere else. "It's just pasted on there," he told the court. "I don't write across the page like that."
Larson stepped in then. "Mrs. Heintzelman has testified under oath," Larson told Duffey. "I have to find her a trustworthy source." The judge gave Duffey another warning not to accuse the Centerpoint property supervisor of forging his signature: "The only thing I am suggesting is do not question what she has testified to."
In the end, it was obvious Centerpoint wouldn't suffer its first loss under Larson. "I do not always like what I have to do," she said, "but I have to follow the rules." She awarded Centerpoint all the money it asked for — $2,400 after attorneys' fees. Centerpoint's attorney, Kelly Hankey, said she spent six hours preparing her client for trial and also wanted coverage for "travel time from my office in Plano, Texas." Her hourly rate is $175, she said.
Duffey was in an improbably good mood after the trial, and planned to press on, even if an appeal cost him more. "Those were not my signatures," he said. "And for them to still rule in the apartment's favor is so unjust, so that's a ring that has to be broken down."