Owen v. City of Portland

• Decision Date: 08 July 2020
• Docket Number: A165633
• Citation: 470 P.3d 390,305 Or.App. 267
• Parties: Phillip E. OWEN, an individual; Owen Properties, LLC, an Oregon limited liability company; and Michael L. Feves, an individual, Plaintiffs-Appellants, v. CITY OF PORTLAND, an Oregon municipal corporation, Defendant-Respondent.
• Court: Oregon Court of Appeals

305 Or.App. 267

470 P.3d 390

Phillip E. OWEN, an individual; Owen Properties, LLC, an Oregon limited liability company; and Michael L. Feves, an individual, Plaintiffs-Appellants,

v.CITY OF PORTLAND, an Oregon municipal corporation, Defendant-Respondent.

A165633

Court of Appeals of Oregon.

Argued and submitted January 7, 2019.

July 8, 2020

John DiLorenzo, Jr., Portland, argued the cause for appellants. Also on the briefs were Kevin H. Kono, P. Andrew McStay, Jr., and Davis Wright Tremaine LLP.

Denis M. Vannier argued the cause and filed the brief for respondent.

W. Michael Gillette, Portland, argued the cause on behalf of amicus curiae Oregon Association of Realtors. Also on the brief were Sara Kobak and Schwabe, Williamson & Wyatt P.C.

Andrea N. Ogston argued the cause on behalf of amici curiae Legal Aid Services of Oregon and Oregon Law Center. Also on the joint brief were Christina L. Dirks, Stephen S. Walters, and Rebecca Straus.

Before Ortega, Presiding Judge, and Egan, Chief Judge, and Powers, Judge.

ORTEGA, P. J.

Plaintiffs brought this declaratory judgment action against the City of Portland, challenging city Ordinance 188219, which amended a code provision that added tenant protections to address a declared city housing emergency. Most notably, the ordinance requires landlords to pay relocation assistance to tenants under certain circumstances. Plaintiffs argued that the ordinance is invalid under various aspects of state law. The parties brought cross-motions for summary judgment on all issues, and the trial court granted the city's motion and denied plaintiffs’ motion.

On appeal from the resulting judgment dismissing plaintiffs’ case, plaintiffs advance four arguments: (1) the provision in the ordinance that requires landlords to pay relocation assistance to tenants following a rent increase of 10 percent or more if the tenant responds by terminating the tenancy is expressly preempted by the prohibition on rent control ordinances in ORS 91.225 ; (2) the provision in the ordinance that requires the payment of relocation assistance to a tenant after a no-cause termination of a tenancy is implicitly preempted by ORS 90.427 (2017), amended by Or. Laws 2019, ch. 1, § 1; (3) the application of the ordinance to existing contracts is an unconstitutional impairment of the obligations of contracts, in violation of Article I, section 21, of the Oregon Constitution ; and (4) the ordinance impermissibly provides a private right of action to tenants to enforce rights created by the ordinance.

We conclude that (1) the ordinance does not fall within the scope of the prohibition in ORS 91.225 on local rent control ordinances, (2) the ordinance is not implicitly preempted by ORS 90.427 (2017), because that statute sets out only minimum requirements for no-cause terminations, (3) plaintiffs failed to make a cognizable argument under Article I, section 21, and (4) plaintiffs’ argument regarding the private cause of action is foreclosed by Sims v. Besaw's Cafe , 165 Or. App. 180, 997 P.2d 201 (2000). We thus conclude that the trial court did not err in any of the ways asserted by plaintiffs. We further conclude that the trial court's dismissal of the case was not the proper disposition of plaintiffs’ declaratory judgment action, and we therefore vacate and remand the judgment so that the trial court can issue a judgment declaring the respective rights of the parties. See, e.g. , Western Radio Services Co. v. Verizon Wireless, LLC , 297 Or. App. 446, 454, 442 P.3d 218, rev. den. , 365 Or. 534, 451 P.3d 994 (2019) (explaining that the proper disposition in a declaratory judgment action is issuance of a declaration as to the rights of the parties).

On February 2, 2017, the city adopted Ordinance 188219 (the ordinance), which amended Portland Comprehensive Code (PCC) 30.01.085.¹ As set out below, the ordinance added requirements that landlords pay relocation assistance to displaced tenants under certain circumstances. To support the addition of relocation assistance to the city's tenant protections, the city made extensive findings about the state of the rental market, rental supply, the effect of rent increases on involuntarily displacing tenants, and the barriers to those displaced tenants’ ability to obtain new housing. Based on those findings, the ordinance states:

"16. Accordingly, the Portland Renter Protections set forth in City Code Chapter 30.01.085 are amended to include for the provision of relocation assistance for tenants receiving a 90-day notice for a no-cause termination of tenancy or an Economic Eviction (‘Relocation Assistance’).

"17. Relocation Assistance amounts were determined by averaging the range of rental rates of similarly sized units across the city according to the Housing Report. Averaging the range of rents also creates an equitable flat fee that does not vary based on the current rent paid, thus giving property owners a fixed amount to plan for."

The ordinance then amended PCC 30.01.085, in part, by adding the following underscored text:

"A. In addition to the protections set forth in the Residential Landlord and Tenant Act [ (the Act) ], the following additional protections apply to Tenants that have a Rental Agreement for a Dwelling Unit Premises covered by the Act. For purposes of this chapter, capitalized terms have the meaning set forth in the Residential Landlord and Tenant Act.

"B. A Landlord may terminate a Rental Agreement without a cause specified in the Act only by delivering a written notice of termination (the ‘Termination Notice’) to the Tenant of (a) not less than 90 days before the termination date designated in that notice as calculated under the Act; or (b) the time period designated in the Rental Agreement, whichever is longer. Not less than 45 days prior to the termination date provided in the Termination Notice, a Landlord shall pay to the Tenant, as relocation assistance, a payment (‘Relocation Assistance’) in the amount that follows: $2,900 for a studio or single room occupancy (‘SRO’) Dwelling Unit, $3,300 for a one-bedroom Dwelling Unit, $4,200 for a two-bedroom Dwelling Unit and $4,500 for a three-bedroom or larger Dwelling Unit. TheThis requirement s of this Subsection does not apply to Rental Agreements for week-to-week tenancies, or to a Landlord who rents out or leases out only one Dwelling Unit in the City of Portland, or to a Landlord who temporarily rents out the Landlord's principal residence during the Landlord's absence of not more than 3 years, or to Tenants that occupy the same Dwelling Unit as the Landlord. For purposes of the exception provided in this Subsection, ‘Dwelling Unit’ is defined by PCC 33.910, and not by ORS 90.100. For purposes of this Subsection, a Landlord that declines to renew or replace an expiring fixed-term lease on substantially the same terms except for the amount of Rent or Associated Housing Costs terminates the Rental Agreement and is subject to the provisions of this Subsection.

"C. * * * If, within 14 days after a Tenant receives an Increase Notice indicating a Rent increase of 10 percent or more within a 12 month period and a Tenant provides written notice to the Landlord of the Tenant's intent to terminate the Rental Agreement (the ‘Tenant's Notice’), then, within 14 days of receiving the Tenant's Notice, the Landlord shall pay to the Tenant Relocation Assistance in the amount that follows: $2,900 for a studio or SRO Dwelling Unit, $3,300 for a one-bedroom Dwelling Unit, $4,200 for a two-bedroom Dwelling Unit and $4,500 for a three-bedroom or larger dwelling unit. For purposes of this Subsection, a Landlord that conditions the renewal or replacement of an expiring lease on the Tenant's agreement to pay an increase in the Rent or Associated Housing Costs increases the Tenant's Rent, and is subject to the provisions of this Subsection. The requirements of this Subsection do not apply to Rental Agreements for week-to-week tenancies, or to a Landlord who rents out only one Dwelling Unit in the City of Portland, or to a Landlord who temporarily rents out the Landlord's principal residence during the Landlord's absence of not more than 3 years, or to Tenants that occupy the same Dwelling Unit, as defined in Subsection B. of this Section, as the Landlord.

"D. A Landlord that fails to comply with any of the requirements set forth in this Section 30.01.085 shall be liable to the Tenant for an amount up to three months Rent as well as actual damages, Relocation Assistance, reasonable attorney fees and costs (collectively, ‘Damages’). Any Tenant claiming to be aggrieved by a Landlord's noncompliance with the foregoing has a cause of action in any court of competent jurisdiction for Damages and such other remedies as may be appropriate."

(Underscoring and strike outs in original.) The ordinance took effect upon its passage and applied to existing rental agreements.

Plaintiffs are landlords that rent property within the city. They filed this declaratory judgment action against the city, contending that the ordinance is expressly preempted by ORS 91.225, is implicitly preempted by ORS 90.427 (2017), is in violation of Article I, section 21, as it applies to existing leases, and impermissibly creates a private cause of action.

On cross-motions for summary judgment, the trial court rejected each of plaintiffs’ arguments, denying plaintiffs’ motion for summary judgment and granting the city's motion for summary judgment. The court then entered a general judgment dismissing plaintiffs’ action. Plaintiffs appeal from that judgment, asserting that the ordinance is invalid for the same reasons raised below.

"When, as here, the facts are not in dispute, we review rulings on cross-motions for summary judgment to determine whether either party is entitled to judgment as a matter of law." Busch v. Farmington Centers Beaverton , 203 Or. App. 349, 352, 124 P.3d 1282 (2005), rev. den. , 341 Or. 216, 140 P.3d 1133 (2006). We address each of plaintiffs’ arguments in...