The Oregon Court of Appeals has decided two cases impacting tenants and the Oregon Residential Landlord Tenant Act (ORLTA) in the first half of 2022; Shepard v. Ormandy, 320 Or App 521 (2022) and Thomas v. Dillon Family Ltd. P’ship II, 319 Or App 429 (2022).
Shepard v. Ormandy, 320 Or App 521 (2022)
In Shepard, the court addressed the appropriate tenant remedy when a landlord wrongfully charges the tenant for utilities in violation of ORS 90.315(4)(b).
ORS 90.315 is a lengthy, convoluted section of the ORLTA that controls the methods through which a landlord can bill its tenants for utilities. When a landlord is charged by a utility company and passes those charges on to the tenant, a common scenario in an apartment building without separately metered units, then the tenant’s bill must include either: (1) a copy of the utility company’s bill or (2) include a disclaimer stating that the tenant has the right to inspect the bill if they want. ORS 90.315(4)(b)(C). “If a landlord fails to comply . . . the tenant may recover from the landlord an amount equal to one month’s periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater.” ORS 90.315(4)(f).
In Shepard, the landlord billed the tenant each month, for twelve straight months, without including the utility provider’s bill or the required disclosure.[1] At trial, the plaintiff/tenant argued, and the trial court agreed, that they were entitled to 12 months’ rent because the landlord violated the statute 12 separate times by sending 12 bills without the required disclosure.
The Court of Appeals overturned the trial court and held that the proper measure of damages was either twice the total amount wrongfully charged over the entire twelve-month period or one single months’ rent for all twelve instances of non-compliance.
The Court of Appeals reasoned that the “legislature chose language that does not direct a deciding court to award one month’s periodic rent or twice the amount wrongfully charged the tenant, whichever is greater for each and every separate noncompliant bill sent by a landlord, and the legislature would have included language to that effect had that interpretation been intended.” Shepard, at 531.
As a result, in Shephard, the tenant was required to choose between $1,920 (double the $960 wrongfully charged among over the full 12-month period) or a single months’ rent of approximately $754. Under the trial court’s reasoning, the tenant would have been entitled to 12-months’ rent totaling $9,050.
This, of course, represents a huge difference in damages for a tenant. And this holding will massively restrict a tenant’s ability to bring a suit against a landlord who fails to comply with the statute. By restricting the possible recovery to only one instance of one-month’s rent, tenant advocate attorneys will be hard pressed to convince their clients that such a lawsuit is worth the tenant’s time. And tenant attorneys need to be aware of this decision in weighing whether such a claim is worth bringing to them or their client.
Thomas v. Dillon Family Ltd. P’ship II, 319 Or App 429 (2022)
In Thomas, the court of appeals determined that a landlord cannot raise a comparative fault defense in a habitability claim brought by a tenant.
The tenant brought a habitability complaint against the landlord based on the landlord’s failure to properly maintain the unit’s refrigerator after slipping on water leaking onto the kitchen floor and sustaining multiple injuries. The landlord learned of the malfunctioning refrigerator the day before the tenant slipped. The day after the slip and fall, the landlord repaired the refrigerator.
In its answer to the suit, the landlord asserted a comparative-fault defense, essentially arguing that the tenant’s injuries were caused by her own negligence and not the result of a habitability defect of the property. The Court of Appeals held that the landlord cannot claim comparative fault as a defense in the context of a habitability claim by a tenant.
ORS 90.360 states that “Except as provided in this chapter, if there is a material noncompliance by the landlord . . . with ORS 90.320 (Landlord to maintain premises in habitable condition)” the tenant may recover damages (emphasis added). The Court focused on the except as provided in this chapter language in holding “[w]e understand that plain text to provide that any limitations on the recovery of damages or injunctive relief must be found exclusively in ORS chapter 90—the ORLTA—and not outside of that chapter.” Thomas, at 434. Since the ORLTA does not provide a landlord with a common-law, comparative fault defense, the landlord cannot claim one in defending a habitability claim brought by a tenant.
The landlord’s duty to maintain the property in a habitable condition is absolute. The ORLTA is a strict liability set of statutes. See e.g., Humbert v. Sellars, 300 Or 113 (1985); Brewer v. Erwin, 287 Or 435 (1979). If a habitability violation exists, the landlord is strictly liable for damages resulting form that violation, unless the ORLTA itself carves out an exception. A tenant need not prove that a landlord was negligent as a part of a habitability claim, only that the habitability condition existed and the landlord either knew or reasonably should have known of its existence. See, Davis v. Campbell, 144 Or App 288, 293 (1996) (holding that the legislature did not incorporate “common-law negligence principles as predicates to recovery of damages under [ORS 90.360]”).
This ruling eliminates an oft-used avenue for landlords to escape or massively limit their liability for habitability defects. No longer will tenant attorneys have to argue at a motion to dismiss or summary judgement that the tenant is at least partially, if not wholly, at fault for damages resulting from a landlord’s habitability violations. This greatly increases the ability of tenants to demand living conditions that conform to basic concepts of habitability and greatly increases tenants’ incentive and ability to demand remuneration for injuries caused by those violating landlords.
[1] Claims would be limited to twelve months’ worth of billing pursuant to the ORLTA one-year statute of limitations. ORS 12.125.