and submitted March 13, 2018
Clackamas County Circuit Court CV15050554 Katherine E. Weber,
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.
Hadlock, Presiding Judge, and Aoyagi, Judge, and Linder,
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.
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.
Or.App. 165] LINDER, S. J.
landlord-tenant case, plaintiff (landlord) brought this
contract action against defendants, former tenants (tenants),
for unpaid rent and other damages. 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.
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
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.
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.
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.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.
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."
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."
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.
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.
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
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.
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.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. Tenants acknowledged that they did not
tell landlord about the damaged personal
possessions; 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. They took no steps to document their
losses even though they estimated the value of the ruined
possessions at $8, 590. 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.
The Trial Court's Resolution of the Parties'
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.
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,
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 ...