Shepard Inv. Grp. v. Ormandy
| Docket Number | SC S069726 |
| Decision Date | 20 July 2023 |
| Citation | 371 Or. 285 |
| Parties | SHEPARD INVESTMENT GROUP LLC, an Oregon limited liability company, dba Umbrella Properties Management, Respondent on Review, v. Bret Lee ORMANDY, an individual and all other occupants, Petitioner on Review. |
| Court | Oregon Supreme Court |
Argued and submitted March 6, 2023, at Lewis & Clark Law School Portland, Oregon.
On review from the Court of Appeals [*] (CC 19LT16199) (CA A173257)
Matthew G. Shepard, Salem, argued the cause and filed the brief for petitioner on review.
John R. Roberts, Arnold Gallagher P.C., Eugene, argued the cause and filed the brief for respondent on review.
Kristen G. Williams, Williams Weyand Law, LLC, McMinnville filed the briefs for amicus curiae Oregon Trial Lawyers Association.
Before Flynn, Chief Justice, and Duncan, Garrett, DeHoog, Bushong and James, Justices, and Nakamoto, Senior Judge, Justice pro tempore.
The decision of the Court of Appeals is affirmed. The judgment of the circuit court is reversed, and the case is remanded to the circuit court for further proceedings.
In this forceable entry and detainer (FED) action, we are asked to determine the proper calculation of damages that may be awarded to a tenant, following multiple instances of landlord noncompliance with certain utility billing requirements that repeated each month, over a series of months. ORS 90.315 part of the Oregon Residential Landlord and Tenant Act (ORLTA), governs the inclusion of utility or public service charges, such as for sewer or water service, in rental agreements. Subsection (2) of that statute concerns disclosure, requiring landlords to "disclose to the tenant in writing at or before the commencement of the tenancy any utility or service that the tenant pays directly to a utility or service provider that benefits, directly, the landlord or other tenants." Subsection (4) concerns pass-through billing, stating that a landlord "may require a tenant to pay to the landlord a utility or service charge or a public service charge that has been billed by a utility or service provider to the landlord." However, paragraph (4)(b) conditions pass-through billing upon a number of procedural requirements, such as billing the tenant within 30 days, setting out the utility or service charge separately from rent, and providing copies of the service provider's bill or an opportunity to inspect it. If a landlord engages in pass-through billing for public service charges without having met all of the conditions of ORS 90.315(4), a tenant may recover "an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater." OR S 9 0. 315(4)(f).
Here, after plaintiff (landlord) brought an FED action against defendant (tenant) to recover possession of the landlord's premises, tenant alleged a counterclaim that landlord had failed to comply with certain utility billing requirements found in ORS 90.315(4)(b). The trial court agreed with tenant, concluding that landlord had committed 12 separate violations-one per month over the 12 months within the one-year statute of limitations that governs ORLTA actions, ORS 12.125-and awarded tenant statutory damages in an amount equal to 12 months of rent. On landlord's appeal, the Court of Appeals reversed, concluding that the plain text of ORS 90.315(4)(f) showed that the legislature had not intended for each landlord billing violation to be subject to a separate sanction. Shepard Investment Group LLC v. Ormandy, 320 Or.App. 521, 531, 514 P.3d 1125 (2022). We allowed review and now affirm the decision of the Court of Appeals and reverse the judgment of the trial court.
The relevant facts are not in dispute. Landlord owns the Fairfield Village Apartments, and tenant has rented a residential unit in that complex since 2008. In 2013, landlord began charging residents, including tenant, a monthly $40 fat fee for several utilities, including water, sewer, and garbage services. Landlord incorporated a corresponding provision into tenant's subsequent rental agreements.
In November 2019, tenant defaulted on that month's rent charges, causing landlord to issue a statutory "72-hour notice" on November 8. The notice set forth landlord's intent to terminate tenant's rental agreement for nonpayment of rent. Landlord subsequently initiated this FED action on November 13. Tenant counterclaimed, alleging that landlord had violated the utility billing requirements set forth in ORS 90.315(4)(b). Tenant specifically alleged that, over the previous year, landlord had failed to (1) timely bill him in writing for each month's utility charges, as required under ORS 90.315(4)(b)(A); and (2) provide him with an explanation of the "pass through charges" in either the written rental agreement or separate billings, as required under ORS 90.315(4)(b)(B). Tenant claimed that, because landlord had failed to comply with ORS 90.315(4)(b) once each month over a year-long period, he was entitled to recover one month's "periodic rent," ORS 90.315(4)(f), for each of landlord's monthly violations.
The trial court made several factual findings: (1) tenant's monthly rent was $740 for the first 10 months and $825 for the final two months; (2) over the year-long period, landlord had charged tenant $40 monthly for utilities, totaling $480, but never had sent tenant corresponding written or electronic bills for those charges; (3) landlord never offered or provided the original utility bills for tenant's inspection; and (4) landlord had failed to explain, in either the rental agreement or bills, both how the utility providers assessed their charges and how landlord distributed those charges among Fairfield tenants. The court did not find that landlord had overbilled or fraudulently represented the value of the utility and service charges. However, the court did find that landlord had failed to explain the pass-through billing arrangement in the tenant's rental agreement.
Ultimately, the trial court concluded that landlord had violated ORS 90.315(4)(b) 12 times, once each month over the course of a year. As noted, the maximum statutorily permissible award under ORS 90.315(4)(f) is an amount equal to one month's periodic rent or "twice the amount wrongfully charged," whichever is greater. Applying that calculation to the amount actually billed to tenant over the previous year would have totaled only $960 ($480 for the billed utilities at $40 per month, for 12 months, then doubled). However, the court awarded tenant $9,050 in statutory damages, concluding that ORS 90.315(4)(f) required an award totaling one month of rent awarded for each separate monthly utility billing. The court awarded $740 per month for the first 10 months and $825 per month for the last two months, totaling $9,050. The court then deducted tenant's unpaid rent for November (in addition to other unpaid charges), leaving tenant with a damages award of $7,195. Tenant was later awarded an additional $5,068 in costs and attorney fees through a supplemental judgment. Landlord appealed.
Before the Court of Appeals, the parties presented arguments mirroring their positions below. Landlord asserted that ORS 90.315(4)(f) is not a damages provision that should be applied "per violation," that the legislature clearly includes "per violation" language when that is its intent, and that ORS 90.315(4)(f) punishes "a course of conduct which may consist of one or many related acts occurring over an undefined period of time." Landlord further argued that the number of wrongful charges when a landlord is in noncompliance with ORS 90.315(4)(b) is immaterial. Rather, according to landlord, the statutory intent is to encourage landlords to comply by attaching a penalty for statutory violations sufficient to encourage landlords to take remedial action once they become aware of noncompliance with a provision of the ORLTA. Tenant responded that the intent of ORLTA is to penalize landlords for each act of noncom-pliance and that, if damages are not imposed for each discrete violation, then landlords will be incentivized to remain noncompliant rather than addressing violations when they arise. The Court of Appeals agreed with landlord, concluding that landlord's reading comported with the plain text of ORS 90.315(4)(f) because the legislature had chosen wording that "[did] not direct a deciding court to award 'one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater' for each and every separate noncompliant bill sent by a landlord." Shepard Investment, 320 Or.App. at 531. Consistently with its understanding of the statute, that court held that tenant was entitled to "twice the amount wrongfully charged," totaling $960, and it therefore reversed and remanded the trial court's ruling. Id. at 532-33. We allowed review.
The question before us is one of statutory interpretation, which we resolve by applying our usual methodology of considering text, context, and any helpful legislative history. State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009). A statute's context includes, among other things, its immediate context-the phrase or sentence in which the term appears-and its broader context, which includes other statutes on the same subject. See PGE v. Bureau of Labor and Industries, 317 Or. 606, 611, 859 P.2d 1143 (1993).
We turn now to applying those principles to ORS 90.315, the statute at issue, beginning with a brief overview of the ORLTA. In 1973, the legislature enacted the ORLTA, originally modeled after the Uniform Residential Landlord and Tenant Act to "clarify and restate the rights and obligations of tenants and landlords." L & M Investment Co. v Morrison, 286 Or. 397, 405, 594 P.2d 1238 (1979). The ORLTA...
To continue reading
Request your trial