L&M Inv. Co. v. Morrison

• Decision Date: 15 May 1979
• Citation: 594 P.2d 1238,286 Or. 397
• Parties: L&M INVESTMENT CO., by William Leveton, Respondent, v. Larry MORRISON and Carol Morrison, Petitioners. TC 166-925; CA 8310; SC 25997.
• Court: Oregon Supreme Court

Page 1238

594 P.2d 1238

286 Or. 397

L&M INVESTMENT CO., by William Leveton, Respondent, v. Larry MORRISON and Carol Morrison, Petitioners.

TC 166-925; CA 8310; SC 25997.

Supreme Court of Oregon.

Argued and Submitted April 4, 1979.

Decided May 15, 1979.

Michael H. Marcus, Portland, argued the cause and filed the brief for petitioners. With him on the brief were Greg Bennett, Richard Forester, Gary Roberts, Louis Savage, Michael Schumann, Ralph Smith, Beverly Stein and Legal Aid Service, Portland.

Reuben Lenske, Portland, appearing pro se, and Ivan J. Vesely, Portland, argued the cause for respondent. On the briefs were Reuben Lenske, Portland, appearing pro se, and James Scudder, Portland.

Before DENECKE, C. J., and HOLMAN, TONGUE, HOWELL, LENT and LINDE, JJ. ^*

TONGUE, Justice.

This is an action by a landlord under the Forcible Entry and Detainer statute (ORS 105.105 et seq.) to evict a tenant on a month-to-month lease. The tenant filed a counterclaim for damages and an injunction under provisions of the Residential Landlord and Tenant Act of 1973 (ORS 91.700 et seq.), alleging, among other things, that the landlord had failed to maintain the premises in a "habitable condition." The trial judge, sitting without a jury, held that plaintiff was not entitled to possession; that defendants were entitled to continue in possession, to damages and attorneys fees and to a mandatory injunction requiring plaintiff to make certain repairs, and that until such repairs were completed the rental would be reduced from $200 per month to $50 per month.

The Court of Appeals reversed on the ground that defendants, the tenants, had failed to give written notice to plaintiff, the landlord, specifying the acts and omissions constituting the breach and that the tenants would terminate the rental agreement unless the breach was remedied, as required by ORS 91.800(1) (a). The court held that, as a result, defendants were not entitled to damages, an injunction or attorney fees and that plaintiff was entitled to possession. 34 Or.App. 231, 578 P.2d 462 (1978); on rehearing 35 Or.App. 821, 583 P.2d 19 (1978). We allowed defendant's petition for review because of our concern whether the written notice required by ORS 91.800(1)(a) must be given before a tenant is entitled to damages or injunctive relief as provided by ORS 91.800(2). ¹

Defendants offered testimony, which was apparently believed by the trial court as the finder of the facts, and which may be briefly summarized as follows:

In November 1976 defendants rented a house in Portland from L&M Investment Co. (L&M), a partnership consisting of William Leveton and Reuben Lenske, under a written lease for a month-to-month tenancy at $200 per month. Shortly after moving in, Mrs. Morrison began to complain to L&M by telephone about the condition of the house, particularly a toilet which was leaking contaminated water into the kitchen, among other things. ² L&M did not respond to her complaints.

Defendants paid the rent for December and January. On February 1, 1977, Mrs. Morrison sent a check to L&M which was dishonored. On February 14th or 15th she reported the leaking toilet to the Multnomah County Sanitation Department. On February 16th that department sent an abatement notice to L&M. On February 18th L&M sent a notice to defendants to pay the February rent within twenty-four hours or an action would be brought for immediate possession of the property.

On March 4, 1978, L&M filed this FED action. Defendants' answer included a counterclaim for damages and an injunction, as provided by ORS 91.800(2), for the landlord's failure to maintain the premises in a "habitable condition" as required by ORS 91.770.

ORS 91.800 provides as follows:

"Effect of landlord's noncompliance with rental agreement or obligation to maintain premises; generally.

"(1)(a) Except as provided in ORS 91.700 to 91.895, if there is a material noncompliance by the landlord with the rental agreement or a noncompliance with ORS 91.770, the tenant may deliver a written notice to the landlord specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than 30 days after receipt of the notice if the breach is not remedied in seven days in the case of an essential service or 30 days in all other cases, and the rental agreement shall terminate as provided in the notice subject to paragraphs (b) to (d) of this subsection.

"(b) If the breach is remediable by repairs, the payment of damages or otherwise and if the landlord adequately remedies the breach before the date specified in the notice, the rental agreement shall not terminate by reason of the breach.

"(c) If substantially the same act or omission which constituted a prior noncompliance of which notice was given recurs within six months, the tenant may terminate the rental agreement upon at least 14 days' written notice specifying the breach and the date of termination of the rental agreement.

"(d) The tenant may not terminate for a condition caused by the deliberate or negligent act or omission of the tenant, a member of his family or other person on the premises with his consent.

"(2) Except as provided in ORS 91.700 to 91.895, the tenant may recover damages and obtain injunctive relief for any noncompliance by the landlord with the rental agreement or ORS 91.770.

"(3) The remedy provided in subsection (2) of this section is in addition to any right of the tenant arising under subsection (1) of this section."

" * * * "

As previously stated, the trial court held that defendants were entitled to damages and injunctive relief. In reversing the trial court and in holding that a tenant is not entitled to damages or an injunction under ORS 91.800(2) unless he first gives a written "fix or I leave" notice as required by ORS 91.800(1), the Court of Appeals invoked a familiar "rule" of statutory construction that statutes must be read as a whole. It held that such a construction of ORS 91.800 was "compelled" by construing that section together with ORS 91.805, which provides remedies for the failure of landlords to provide "essential services" and provides that as a prerequisite to recovery of damages for the deliberate or grossly negligent failure to provide "essential services" the tenant must first give a "written notice specifying the breach." Upon reading these two sections together, the Court of Appeals concluded that ORS 91.800(2) could not properly be construed "as an independent provision for remedies," particularly in view of the further provision of ORS 91.805(4), which precludes relief to a tenant under ORS 91.800 if he proceeds with an action for damages under ORS 91.805(1)(b). (34 Or.App. at 238, 578 P.2d 462. See also 35 Or.App. at 825, 583 P.2d 19.) ³

The Court of Appeals went on to hold that if it were to accept defendants' contention that they were entitled to damages and an injunction under ORS 91.800(2) (without giving a written "fix or I leave" notice, as required by ORS 91.800(1)), "other sections of the Act relating to damages would be superfluous because ORS 91.800(2) would be all-encompassing with respect to damages for any noncompliance with the rental agreement or with ORS 91.770, requiring the landlord to maintain the premises in a habitable condition" and that "(t)aken as a whole, the Act clearly indicates that such a construction was not intended." (34 Or.App. at 238, 578 P.2d at 466.)

In a supplemental opinion, the Court of Appeals discussed the problem as it relates to remedies available to a month-to-month tenant, as in this case, and again held that "the answer to this dilemma" is found in ORS 91.805, under which such a tenant has "numerous remedies" for the failure to provide "essential services." (35 Or.App. at 824-25, 583 P.2d 19.)

As to whether the term "essential services," as used in ORS 91.805, is as broad as the "habitability" requirements of ORS 91.770, the Court of Appeals recognized that the former is probably "not as broad" as the latter term. ⁴ The Court of Appeals stated that it would appear from ORS 91.805 and 91.770 that " 'essential services' are among the habitability requirements set forth in (ORS 91.770);" that "(w)hether a given (habitability) requirement is an essential service will have to be determined on the facts of each case," but that in this case defendants "disclaimed rights under ORS 91.805 and did not give the notice they concede is required by that section." (35 Or.App. 825, 583 P.2d 21)

Finally, the Court of Appeals concluded that the legislature intended to "draw a line" between the remedies of a tenant who wants to remain in possession where the landlord does not have an option to terminate, and a tenant who wants to remain in possession only if the premises are brought up to habitability standards, giving the landlord the option to terminate, subject to "whatever remedies the tenant may have under ORS 91.800(2)." The court stated that "(i)n either case the tenant must give written notice to the landlord advising him of the remedy he is asking." (35 Or.App. at 826, 583 P.2d at 22)

We recognize the difficulties faced by the Court of Appeals in arriving at a satisfactory solution to the problems presented by this case. We also recognize that the intent of the legislature, as expressed in ORS 91.800, 91.770 and 91.805, is not entirely clear and that some ambiguities and inconsistencies are apparent upon examination of these sections. We cannot, however, agree with the analysis by the Court of Appeals of those provisions of the Residential Landlord and Tenant Act.

The Residential Landlord and Tenant Act (ORS 91.700 et seq.) was enacted in 1973 to clarify and restate the rights and obligations of tenants and landlords. Among the most important provisions of the Act is ORS 91.770, which requires landlords to maintain a dwelling within a "habitable condition," as defined in that section of the Act.

As we read that Act,...