Waldner v. Stephens

• Decision Date: 31 December 2008
• Docket Number: CC 03C21165.,SC S055351.,CA A127595.
• Citation: 200 P.3d 556,345 Or. 526
• Parties: Dave WALDNER, Michelle Kasper, Jacob Lahmann and Michelle Kasper, As Guardian Ad Litem For Joshua Bush and Hanna Waldner, Minors, Petitioners on Review, v. Stephen STEPHENS, Respondent on Review. Stephen Stephens, Third-Party Plaintiff, v. Tran Co., an Oregon corporation, Third-Party Defendant.
• Court: Oregon Supreme Court

200 P.3d 556

345 Or. 526

Dave WALDNER, Michelle Kasper, Jacob Lahmann and Michelle Kasper, As Guardian Ad Litem For Joshua Bush and Hanna Waldner, Minors, Petitioners on Review, v. Stephen STEPHENS, Respondent on Review.

Stephen Stephens, Third-Party Plaintiff, v. Tran Co., an Oregon corporation, Third-Party Defendant.

CC 03C21165.

CA A127595.

SC S055351.

Supreme Court of Oregon, En Banc.

Argued and Submitted May 14, 2008.

Decided December 31, 2008.

On review from the Court of Appeals.^*

Robert K. Udziela, Beaverton, argued the cause and filed the brief for petitioners on review.

Thomas W. Brown, of Cosgrave Vergeer Kester LLP, Portland, argued the cause and filed the brief for respondent on review. With him on the brief was Julie A. Smith.

Arthur C. Johnson, and Douglas G. Schaller, of Johnson, Clifton, Larson and Schaller, P.C., Eugene, filed the brief for amicus curiae Pamela J. Pearson.

GILLETTE, J.

In this action alleging negligence and other claims, plaintiffs sought damages from their former landlord for various injuries that, they alleged, had resulted from unhealthful conditions in a dwelling that they rented from that landlord. On defendant's ORCP 21 A(8) motion, the trial court concluded that plaintiffs had failed to state a claim in common-law negligence, that the only claims that plaintiffs had pleaded were subject to the one-year statute of limitations set out in ORS 12.125 for "action[s] arising under a rental agreement or ORS Chapter 90 [(the Oregon Residential Landlord Tenant Act (ORLTA))],"¹ and that dismissal therefore was warranted because plaintiffs had not filed their action within that one-year limitations period. Plaintiffs appealed, arguing that they had pleaded a common-law negligence claim and that the relevant limitations period was the two-year period set out at ORS 12.110(1) for "injury to the person or rights of another, not arising on contract and not especially enumerated in [ORS chapter 12]." The Court of Appeals rejected that argument and affirmed. Waldner v. Stephens, 213 Or.App. 610, 162 P.3d 342 (2007). Plaintiffs petitioned for review by this court, and we granted their petition to consider whether plaintiffs' complaint states a claim in common-law negligence and, if so, whether the trial court applied the wrong statute of limitations to that claim.

When we review a trial court's dismissal of a claim under ORCP 21 A(8), as we do here, we accept as true all well-pleaded allegations of fact and all reasonable inferences that may be drawn from them. Scovill v. City of Astoria, 324 Or. 159, 164, 921 P.2d 1312 (1996). The relevant allegations are contained in plaintiffs' third amended complaint,² which purports to assert a claim for common-law negligence based on certain conditions in plaintiffs' home.³ The negligence claim alleged, among other things, that, in 1997, plaintiffs entered into a written agreement with defendant to rent a residential unit in a duplex that defendant owned; that, under the written agreement, defendant retained sole and exclusive control over the roof and exterior spaces of the building as well as sole and exclusive responsibility to repair those areas;⁴ that, while plaintiffs occupied the unit, water and moisture intruded through the roof and exterior walls of the building and, ultimately, into the residence; that plaintiffs notified defendant of the water intrusions and of defects relating to that problem; that defendant inspected plaintiffs' residence and orally promised to make repairs; that, based on defendant's promise, plaintiffs continued to occupy and make rental payments for the unit; and that, as a result of the intrusion of water and moisture into the building, mold spores, fungi, bacteria, and related toxins invaded plaintiffs' unit, contaminating plaintiffs' personal property and causing them to develop serious medical problems.

The pleadings also contained other, more specific allegations of negligence, some of which used terminology drawn directly from the ORLTA:

"At said times and places, [defendant] was negligent and failed to exercise reasonable care in one or more of the following particulars:

"a. In failing to inspect, install, maintain or keep in good repair the roof, walls, flooring and other structural areas of the residence over which defendant maintained exclusive control, did not convey to plaintiffs as part of the leasehold, and prohibited plaintiffs from repairing;

"b. In failing to provide and maintain habitable premises by not keeping the premises safe for normal and reasonably foreseeable uses;

"c. In failing to prevent the invasion of water, moisture and * * * fungi, mildew, bacteria and other toxins;

"d. In neglecting or ignoring after notice from plaintiffs the intrusion of toxins, water, moisture, mold, and other harmful substances that invaded the premises;

"e. In failing to eliminate the toxic conditions of the property that defendant (1) caused, (2) allowed intentionally, or (3) allowed to exist in reckless disregard of the safety of others;

"f. In failing to provide adequate ventilation for the house;

"g. In failing to warn plaintiffs of the dangers associated with roof leaks, wet rot, and mold in houses;

"h. In failing to immediately take prompt or effective measures to protect plaintiffs from harm.

"At said times and places, [defendant] was the owner and landlord of the premises leased to plaintiffs. In his status as a landlord, defendant retains the duty to maintain the leased premises in habitable condition. The duty continues through the course of the tenancy. Defendant was negligent and failed to exercise reasonable care in one or more of the following particulars:

"a. In failing to provide and maintain a dwelling in a habitable condition in that the waterproofing and weather protection of the roof and exterior walls, including windows and doors, was [sic] inadequate (ORS 90.320(a));

"b. In failing to provide and maintain habitable premises by not keeping the building safe for normal and reasonably foreseeable uses (ORS 90.320(f));

"c. In failing to provide and maintain habitable premises by not maintaining the walls and ceilings in good repair (ORS 90.320(h)); and

"d. In failing to provide and maintain habitable premises by not providing or maintaining appropriate ventilation in the dwelling (ORS 90.320(i))."

Defendant moved to dismiss plaintiffs' action in its entirety, arguing that all of the claims alleged were time barred under ORS 12.125, the one-year statute of limitations that applies to "action[s] arising under a rental agreement or [the ORLTA]." Defendant reasoned that, because plaintiffs' claims relied on defendant's status as plaintiffs' landlord and on the landlord/tenant relationship that existed between defendant and plaintiffs, they necessarily arose "under [the] rental agreement" that memorialized that landlord/tenant relationship. Defendant also argued that, because plaintiffs' negligence claim referred to various duties that are imposed on landlords by the ORLTA,⁵ that claim "ar[ose] under * * * [the ORLTA]" within the meaning of ORS 12.125. The trial court ultimately granted defendant's motion, holding that plaintiffs had failed to state a claim in common-law negligence but that, instead, their claims "arose under" provisions of the ORLTA and were time barred under ORS 12.125.

On plaintiffs' appeal, the Court of Appeals affirmed. Waldner, 213 Or.App. at 612, 162 P.3d 342. The court noted that the complaint alleged that the parties had entered into a rental agreement under which defendant retained sole and exclusive control of the roof, walls, and other structural areas of the duplex and had further alleged that defendant had a duty to plaintiffs, which arose out of plaintiffs' status as tenants, to "be certain that the portions over which defendant retained control were kept in a reasonably safe condition of repair, and to maintain the premises in a habitable condition." Id. at 617, 162 P.3d 342. The court then concluded that,

"when read together, the above allegations make it clear that plaintiffs' claims are based on the relationship that `arises' or originates from their rental agreement. In that light, we readily conclude that the legislature intended ORS 12.125 to apply to claims like those made by plaintiffs."

Id. The court also decided that, when the complaint alleged that defendant had promised to repair the premises and plaintiffs had stayed on in reliance on that promise, they once again were alleging a "rental agreement," albeit a new, oral one. Consequently, the court concluded, plaintiffs' alternative negligence theory—that defendant had assumed a duty to repair independent of any rental agreement—also "ar[o]se[] under a rental agreement" and was time barred under ORS 12.125. Id. at 618, 162 P.3d 342.⁶

Before this court, plaintiffs argue that, contrary to the views expressed by the trial court and the Court of Appeals, they have alleged a common-law negligence claim in their third amended complaint that does not "aris[e] under a rental agreement or [the ORLTA]," and, thus, is not time barred under ORS 12.125. Plaintiffs contend, instead, that that claim is subject to the two-year statute of limitations set out at ORS 12.110(1), which applies to actions "for any injury to the person or rights of another, not arising in contract and not especially enumerated in [ORS chapter 12]."

Plaintiffs do not deny that their negligence claim in some broad sense relies on a rental agreement, in that their status as tenants and their tenant/landlord relationship with defendant would not exist without some form of rental agreement. But, they contend, the mere fact that a plaintiff and defendant are in a landlord/tenant relationship is not sufficient in itself to bring ORS 12.125 into play. They argue, and we agree, that Vollertsen v. Lamb, 302 Or. 489, 732 P.2d 486 (1987), and Jones v. Bierek, 306 Or. 42, 755 P.2d 698 (1988), disposed of that notion.⁷

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