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Eddy v. Anderson

Court of Appeals of Oregon

September 19, 2018

Janet EDDY and Rodger Eddy, Plaintiffs-Respondents,
Staci ANDERSON, Defendant-Appellant, and James ANDERSON and Deborah Rocha, Defendants.

          Argued and submitted March 13, 2018

          Clackamas County Circuit Court CV15050554 Katherine E. Weber, Judge.

          Frank Wall argued the cause and filed the briefs for appellant.

          Michael T. Davis argued the cause for respondents. Also on the brief was Davis Galm Law Firm.

          Before Hadlock, Presiding Judge, and Aoyagi, Judge, and Linder, Senior Judge.

         Case Summary:

         Tenants appeal from a general judgment in favor of landlord in a contract action, assigning error to the trial court's dismissal of their two counterclaims. Landlord brought the action for unpaid rent and other damages. Tenants counterclaimed for damages under ORS 90.360(2) based on landlord's alleged failure to maintain the dwelling in a habitable condition and for relief from liability for unpaid rent based on landlord's alleged failure to give an abandoned property notice pursuant to ORS 90.425. Tenants argue (1) that the trial court applied the wrong statute, ORS 90.365(1), in concluding that tenants were required to give landlord written notice of the habitability violations as a condition of seeking damages, and (2) that "personal property" within the meaning of ORS 90.425 includes property of any kind, including trash, debris, and garbage, thus requiring landlord to give an abandoned property notice to tenants before disposing trash that they left on the premises after vacating it.


         The trial [294 Or.App. 164] court did not err in dismissing tenants' counterclaims. The trial court found that tenants had brought their counterclaim for damages in bad faith, which defeats tenants' counterclaim for damages under either ORS 90.360(2) or ORS 90.365(1). Additionally, "personal property" for purposes of ORS 90.425 does not include trash, debris, or other garbage and tenants therefore were not entitled to relief from unpaid rent based on landlord's failure to give tenants an abandoned property notice under ORS 90.425.


         [294 Or.App. 165] LINDER, S. J.

         In this landlord-tenant case, plaintiff (landlord) brought this contract action against defendants, former tenants (tenants), for unpaid rent and other damages.[1] Tenants asserted two counterclaims in response. The first was for damages based on landlord's alleged failure to maintain the dwelling in a habitable condition. The second sought relief based on landlord's failure to give an abandoned property notice before disposing of items that tenants left on the premises after they vacated it. Sitting as finder of fact, the trial court rejected tenants' counterclaims and awarded landlord most, but not all, of the unpaid rent and damages that landlord sought. Tenants appeal, assigning error to the dismissal of each of their counterclaims. We affirm.

         I. BACKGROUND

         A. Factual Evidence

         The facts at trial were disputed, particularly as they bear on tenants' counterclaims. Applying our familiar standard of review, we consider the evidence in the light most favorable to the explicit and implicit findings of the trial court. See L & M Investment Co. v. Morrison, 286 Or. 397, 399, 594 P.2d 1238 (1979) (viewing evidence in landlord-tenant dispute in light most favorable to trial court's resolution as trier of fact). We describe countervailing evidence to the extent that it provides helpful context.

         In November 2013, landlord and tenants entered into a month-to-month tenancy for a two-story residence with three bedrooms and two bathrooms. The written rental agreement included, as an addendum, a lengthy list itemizing landlord's personal property that was included with the rental, such as a refrigerator, microwave oven, toaster, [294 Or.App. 166] washer and dryer, lawnmower, and numerous household and yard items. The agreed rent was $1, 400 a month, due on the first of each month, with late charges of $10 a day if not paid by the fifth of each month. Under the rental agreement, tenants were responsible for reimbursing landlord for city water utility charges, for abiding by all city ordinances, and for performing all tenant obligations under ORS chapter 90 (Oregon Residential Landlord and Tenant Act). Tenants also agreed to pay various move-in charges and deposits, which landlord agreed to let them pay in installments after taking possession.

         Within a few days of moving in, tenants gave landlord a written list of items that they believed needed repair in the residence. That list included "water backup in [the] bathroom drain downstairs." Landlord repaired the drain and took care of the other issues on the list, except as landlord and tenants otherwise agreed.

         Several months into the tenancy, around March 2014, tenants called landlord because the downstairs shower drain had backed up. Within a few hours of that call, landlord went to the residence to fix the backup and to help with any cleanup. Landlord cleared the line by using an "expander bulb" which, when inserted down the drain and into the sewer line, uses pressure from a water hose to clear any blockage. The water from the backup was contained in and around the bathroom floor drain, in an area of at most four square feet, which was damp with water that was less-than-a-pencil's width (or about one-eighth inch) deep. Landlord cleaned up the residual dampness and then left. Before leaving, he gave the tenants the "expander bulb" plumbing tool in case the drain got blocked again. The landlord had not had any problems with the downstairs plumbing since undertaking some major repairs to the sewer line in 2007.[2]No tenants after that, until these tenants, had alerted him to any problems with the downstairs plumbing. Landlord believed that, after he cleared the line, tenants should have [294 Or.App. 167] no problem with it, but in his experience, tenants sometimes put inappropriate items down the toilet and into the sewer lines. Landlord urged tenants to "review what materials are going into the sewer line that could cause the blockage" and suggested that they might want to use the plumbing tool every couple of months to help prevent any blockage.

         From the outset of the tenancy, tenants struggled to afford the $1, 400 in rent, and they generally tendered their payments late, or not in full, or both. Five or six months into the tenancy, in May 2014, tenants tendered landlord a payment of only $175. In an accompanying letter, tenants urged landlord to reduce the monthly rent because the costs of rent, garbage, oil, electricity, and utilities made it "so very expensive" for them to live there. Tenants implored landlord, who they knew "[isn't] a heartless man," to "please, please consider lowering it to a more reasonable cost since there is so much repair to be done" in terms of "leaks and flooding in the basement." They concluded saying, "Please, please think about it * * * we would very much appreciate it if you could lower it."

         Landlord replied in writing, stating that he would not consider an adjustment in the rent until tenants paid him the unpaid move-in charges, back rent, and unpaid utility charges. He reminded tenants that they had assured him when they moved in that they could easily cover rent and utilities and would pay him the move-in charges within a few months, none of which had been paid. Tenants had also told landlord that there would be other individuals assisting them economically and that they would obtain "county assistance"; landlord asked tenants why those things were not happening. Landlord concluded with: "You must pay the remainder of the May rent, plus another $200 for utilities, this month, so that we do not fall farther behind. I am willing to work with you but I need your help too."

         A few days later, tenants paid landlord $1, 200. In the months that followed, tenants continued to pay the rent late, sometimes only partially, and sometimes not at all. In October 2014, landlord wrote tenants again about their increasing debt of unpaid rent, move-in charges, and utility charges. Landlord advised tenants that he could no [294 Or.App. 168] longer afford to allow a bigger balance to build up and that they must pay him $1, 420 in October, and also give him an "intended payment schedule." Tenants paid only partial rent in October and November, and then paid no rent at all in December 2014 and January 2015.

         In mid-January 2015, tenants wrote landlord and left him a phone message informing him that the downstairs shower drain had again backed up. In the written letter sent to landlord, tenants said that "this will make it about the 6th or 7th time this has happened since we have lived here." Landlord returned the phone call within an hour and sent a letter acknowledging tenants' letter and phone message. In the letter, landlord confirmed that he had called in response to their message and talked to a member of tenants' family, who said that, using the plumbing tool landlord had left with tenants, they "immediately broke up some blockage in the line" and solved the problem. Landlord's letter said he was not aware that there had been six or seven other blockages, advised tenants to consider reviewing "what materials are going into the sewer line that could cause the blockage," and urged them, if a blockage occurred again, to immediately cease using the plumbing and to clear the line by using simple water pressure. Tenants' January 2015 letter was the first notice of any kind that landlord received about the shower drain problem after the one call he responded to in March 2014, a few months after tenants first moved in. Tenants did not respond to landlord's letter.

         Tenants continued to default on their payments. They did not tender any partial or late rent payments, nor any payments for water bills or other charges. Landlord then brought an eviction action against tenants. In that proceeding, tenants agreed to vacate the premises by a specified date and to pay landlord $1, 400. They did not pay the $1, 400, and stayed in possession over a month past the stipulated move-out date. Landlord was about to pursue his remedies for eviction when one of the tenants "begged for another week to get things out" of the residence and offered to pay landlord $300 for that additional week. Landlord agreed. Tenants never paid the $300, but they were gone at the end of the additional week. Tenants did not give landlord notice that they had vacated. Landlord could not remember the [294 Or.App. 169] exact date when he discovered that they had moved out, but it was sometime in April 2015, possibly early that month.

         Landlord inspected the premises after tenants vacated. Some of the personal property included with the rental, such as the refrigerator, a heavy-duty washing machine, and the toaster, were gone. Other items, such as the lawnmower, were "destroyed." Still other items, such as some of the blinds and other fixtures, were damaged and had to be repaired. Tenants left behind a pile of debris in the yard that, earlier, had resulted in a city nuisance citation and $451 fine for which tenants never reimbursed landlord. The debris was to have been removed from the yard, but instead, landlord found it left at the side of the house, under a tarp. Landlord took four pickup loads to the dump to dispose of the debris. After landlord repaired and replaced the damaged property, and cleaned up the yard, another person moved into the residence. That person experienced no problems with the downstairs shower drain, despite regular usage of both the upstairs and downstairs bathrooms and heavy usage of the washing machine.

         Tenants presented evidence in support of their counterclaims, evidence that the trial court not only disbelieved, but that also contributed to the court's conclusion that tenants' counterclaims were ill-motivated. According to tenants' evidence, the problem caused by the downstairs shower drain was severe and tenants incurred significant property damage because of it. Tenants and their witnesses described the backups as persistent and frequent.[3]Tenants claimed that they had repeatedly complained to landlord verbally about the problem, and that landlord had done nothing in response, other than tell them to clear the line with the "expander bulb," which rarely helped for long. According to tenants, when a blockage in the line occurred, sewage-contaminated water backed up through the drain and entered the basement, creating an unsanitary and "disgusting" mess to clean up. Tenants described the backups, at their worst, as resulting in flooding several inches [294 Or.App. 170] deep, almost like "a lake" in the basement, that flowed out of the bathroom, into the adjacent bedroom, and into other areas of the basement. Tenants asserted that, during one "really bad" backup, sewage-contaminated water flowed to the far side of the basement, where they had personal clothing and other items stored in boxes, ruining many possessions.[4] Tenants acknowledged that they did not tell landlord about the damaged personal possessions;[5] that they did not take photographs or otherwise attempt to document the damages to their personal property; and that they did not have receipts or other evidence to corroborate their claims of property loss.[6] They took no steps to document their losses even though they estimated the value of the ruined possessions at $8, 590.[7] In tenants' opinion, the residence was not livable and either had no rental value throughout the tenancy or had at most some partial rental value at the start of the tenancy. Yet tenants remained on the premises for over a year and pursued no legal avenues to remedy the condition that they claimed made the residence unfit for occupancy.

         B. The Trial Court's Resolution of the Parties' Claims

         After tenants vacated the premises, landlord brought this contract action seeking damages of $13, 540.55 for amounts that tenant owed landlord but never paid (rent, late charges, the city fine, and utility charges). Landlord also sought damages for costs that he incurred in replacing and repairing the personal property included with the premises, and damages for cleaning up the property after tenants vacated it.

         [294 Or.App. 171] Tenants counterclaimed. Their first counterclaim sought damages based on landlord's failure to maintain the residence in habitable condition. In particular, and relying principally on the alleged drainage backups, [8] tenants sought "diminished rental value" of $16, 800 ($1, 400 per month for 12 months) and $8, 590 for the damages to their personal possessions allegedly caused by the shower drain backups, for a total damage award of $25, 390. Tenants' second counterclaim sought various statutory remedies, including relief from ...

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