Opinion
3:22-cv-00664-YY
09-12-2022
GERALD BAILEY and RUBY BAILEY, Plaintiffs, v. EVERGREEN ESTATES MCH, LLC, Defendant.
FINDINGS AND RECOMMENDATIONS
Youlee Yim You United States Magistrate Judge
FINDINGS
Plaintiffs' Amended Complaint asserts nine claims arising out of a landlord-tenant dispute. Defendants have filed three narrow motions directed at portions of plaintiffs' claims. First, defendants have moved to dismiss plaintiffs' negligence per se claim because negligence per se is not a distinct cause of action under Oregon law. That motion should be denied because it offers nothing other than a technical quibble with the label that plaintiff uses for the claim. Next, defendant filed two motions to strike under Federal Rule of Civil Procedure 12(f) seeking to eliminate from the Amended Complaint facts or other allegations related to noneconomic and punitive damages. Although Ninth Circuit law is clear that a motion to strike under Rule 12(f) is not the proper vehicle to seek dismissal of damages allegations, at defendant's request, and because both parties had the opportunity to address the sufficiency of plaintiffs' claims for noneconomic and punitive damages under Oregon law, the motions to strike should be construed as motions to dismiss under Rule 12(b)(6). The motion to dismiss paragraph 57 should be denied because plaintiffs' Amended Complaint pleads facts sufficient to show, at least at this early phase, entitlement to noneconomic damages under the Oregon Residential Landlord Tenant Act (“ORLTA”). The motion to dismiss paragraph 61 should be granted because punitive damages are not available under the ORLTA.
I. Background
Plaintiffs began renting a home in southeast Portland in 2008. Am. Compl. ¶¶ 3, 5, ECF 1-3. Defendant became the residence's owner and landlord in 2020. Id. ¶ 7. Defendant inspected the property and plaintiffs told defendant about several lingering maintenance issues, like a leaky sink, rotting subfloors, ongoing mold issues, and a deteriorating front deck, among others. Id. ¶ 9. At another inspection in October of 2021, plaintiffs again identified the maintenance problems; defendant apparently took no action. Id. ¶ 10. In November 2021, plaintiffs submitted with their rent payment a repair request regarding the flooring and leaking sink in hopes of getting the issues addressed before hosting family for the holidays. Id. ¶ 11. Shortly after, defendant posted a “Termination Notice” on the front door of the home notifying plaintiffs that their “tenancy would terminate on February 10, 2022 at 11:59 p.m.” Id. ¶ 12. Plaintiffs filed this suit in May of 2022, claiming that the termination notice was deficient in many respects and that defendant's conduct regarding the termination ran afoul of several provisions of the ORLTA, O.R.S. 90.105, et seq, Portland City Code, and Oregon common law. ECF 1-3. Defendant removed the case to federal court based on diversity jurisdiction, ECF 1, and subsequently filed the present motions. ECF 11.
II. Discussion
A. Motion to Dismiss
Defendant asserts that plaintiffs' ninth claim for relief, captioned as “Negligence Per Se” should be dismissed because Oregon law does not recognize negligence per se as a stand-alone claim. Mot. Dismiss and Strike 2-3, ECF 11 (citing Abraham v. T. Henry Const., Inc., 350 Or. 29, 35 n.5 (2011)) (“[N]egligence per se is not a separate claim for relief, but is simply shorthand for a negligence claim in which the standard of care is expressed by a statute or rule.”).
Defendant's position is correct, at least as far as it goes. But it is also well-established that a plaintiff can assert negligence per se as a theory that, if established, then satisfies certain elements of a common law negligence claim. Osborne v. City of Burns, Or., No. 2:11-CV-00080-SU, 2012 WL 930815, at *12 (D. Or. Feb. 27, 2012), report and recommendation adopted, No. 2:11-CV-00080-SU, 2012 WL 930234 (D. Or. Mar. 19, 2012) (“A negligence per se claim asserts that a statute establishes a standard of care, and it uses a violation of the statute to support a prima facie case for ordinary negligence.”) (citing Bellikka v. Green, 762 P.2d 997, 1009 (1988)). The annals of this court's decisional law are filled with plaintiffs asserting just such claims. See, e.g., Santoro v. Endologix Inc., No. 3:19-CV-01679-YY, 2020 WL 6295077, at *12 (D. Or. Oct. 6, 2020), report and recommendation adopted sub nom. Santoro v. EndologixInc, No. 3:19-CV-01679-YY, 2020 WL 6287473 (D. Or. Oct. 27, 2020) (“To establish a negligence per se claim under Oregon law, a plaintiff must demonstrate that (1) defendants violated a statute [or rule]; (2) that plaintiff was injured as a result of that violation; (3) that plaintiff was a member of the class of persons meant to be protected by the statute [or rule]; and (4) that the injury plaintiff suffered is of a type that the statute [or rule] was enacted to prevent.”) (citing Buoy v. Soo Hee Kim, 232 Or.App. 189, 204 (2009)) (emphasis omitted); Hammick v. Jacobs, No. 3:19-CV-00200-JR, 2020 WL 6135464, at *5 (D. Or. Oct. 19, 2020) (“[T]he doctrine of ‘negligence per se' does not create a cause of action . . . it refers to a standard of care that a law imposes within a cause of action for negligence. Accordingly, in order to prevail on a claim for negligence or negligence per se, the plaintiff must establish: (1) the defendant owed her a duty; (2) the defendant breached that duty; (3) a causal link exists between the defendant's breach and the plaintiff'[]s injury, and (4) damages.”) (internal citations and quotation marks omitted).
Granting defendant's motion would, in effect, require plaintiffs to remove the words “per se” from the caption of the ninth claim for relief, or perhaps re-arrange the eighth claim for relief to include the allegations related to the negligence per se “claim” and re-label those allegations as a separate “count” or “theory.” See Am. Compl. ¶¶ 74-90, ECF 1-3. Federal pleading requirements do not require elevating form over substance in this way. See Team Enterprises,LLP v. W. Inv. Real Est. Tr., No. CV F 08-0872 LJO SMS, 2009 WL 1451635, at *9 (E.D. Cal. May 20, 2009) (“[T]he fourth cause of action asserts a claim arising out of the operator's responsibility for the contamination. The ‘label' does not establish a claim. A claim is sufficient if the facts alleged support any valid claim.”); Skaff v. Meridien N. Am. Beverly Hills, LLC, 506 F.3d 832, 839 (9th Cir. 2007) (“Rule 8's concluding admonishment that ‘[a]ll pleadings shall be so construed as to do substantial justice' confirms the liberality with which we should judge whether a complaint gives the defendant sufficient notice[.]”) (quoting FED. R. CIV. P. 8(f)).
Defendant does not otherwise attack the sufficiency of plaintiffs' negligence per se allegations, or offer any other reason, apart from the labelling of the claim, as to why the ninth claim should be dismissed. See Mot. Dismiss and Strike, 2-3, ECF 11. The motion to dismiss accordingly should be denied.
B. Motions to Strike
Defendant also bring two motions to strike under Rule 12(f) aimed at two different portions of the complaint that assert entitlement to particular forms of damages. Mot. Dismiss 37, ECF 11. Paragraph 57 alleges that defendant's retaliatory conduct caused plaintiffs' various medical ailments, mental distress, and loss of consortium. Am. Compl. ¶ 57, ECF 1-3. In paragraph 61, plaintiffs reserve the right to seek punitive damages under O.R.S. 31.725. Id. ¶ 61. Defendant asserts that these types of damages are not available under the ORLTA, and thus should be stricken as “immaterial” or “impertinent” under Rule 12(f). Mot. to Dismiss and Strike 3, 6, ECF 11.
Rule 12(f), however, is not the proper procedural vehicle for resolving disputed factual or legal issues. Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 974-75 (9th Cir. 2010) (“[R]ule 12(f) does not authorize district courts to strike claims for damages on the ground that such claims are precluded as a matter of law.”); Hanney v. Epic Aircraft LLC, No. 6:21-CV-01199-MK, 2022 WL 960652, at *2 (D. Or. Mar. 15, 2022), report and recommendation adopted, No. 6:21-CV-1199-MK, 2022 WL 959223 (D. Or. Mar. 30, 2022) (“Courts may not resolve disputed and substantial factual or legal issues in deciding a motion to strike.”) (citing Whittlestone, 618 F.3d at 973).
Defendant requests that the motion to strike be treated as a Rule 12(b)(6) motion to dismiss for failure to state a claim, and then offers argument as to why noneconomic and punitive damages are not recoverable under the ORLTA. Reply 4. In their response to the motions to strike, plaintiffs addressed the legal sufficiency of the allegations in paragraph 57, although they did not address paragraph 61. In the interest of efficiency and because both parties had the opportunity to address the legal sufficiency of these particular allegations, defendant's motions to strike are construed as motions to dismiss.
1. Paragraph 57-Noneconomic Damages for Landlord Retaliation
Defendant has moved to dismiss the allegations in paragraph 57 of the Amended Complaint, in which plaintiffs allege facts that would tend to support an award of noneconomic damages for retaliation under the ORLTA. Mot. 3-7, ECF 11. Paragraph 57 alleges:
Defendant's conduct caused or was a substantial factor in bringing about Plaintiff Gerald Bailey's experience with chronic stress, sleeplessness, depression, panic attacks, nausea, aggravated hypertension, and subsequent symptomatic [congestive heat failure]. Defendant's conduct also caused or was a substantial factor in bringing about Plaintiff Ruby Bailey's mental suffering, sleeplessness, and loss of consortium.Am. Compl. ¶ 57, ECF 1-3. Defendant asserts that noneconomic damages are not available under the ORLTA and thus even if the facts were true, they would not state a claim for relief. Reply 46, ECF 13.
The relevant ORLTA statute prohibits retaliation by a landlord against a tenant who, among other things, “made any complaint to the landlord that is in good faith and related to the tenancy.” O.R.S. 90.385(1)(b). If a landlord violates subsection (1), the “tenant is entitled to the remedies provided in ORS 90.375[.]” O.R.S. 90.385(3). That statute in turn allows an aggrieved plaintiff to “obtain injunctive relief to recover possession or may terminate the rental agreement and recover . . . up to two months' periodic rent or twice the actual damages sustained by the tenant, whichever is greater.” O.R.S. 90.375.
The Oregon Supreme Court in Brewer v. Erwin interpreted “actual damages” in the context of a retaliation claim under the ORLTA to include “compensation for tangible harm resulting from the statutory violation, though it need not be economic harm.” 287 Or. 435, 448 (1979), abrogated on other grounds by McGanty v. Staudenraus, 321 Or. 532 (1995). That tangible harm “does not extend to the sort of annoyance, anger, or sense of frustration that frequently accompanies a dispute over a business transaction even when these common reactions are described as ‘emotional distress.' ” Id. But it does include damages “such as physical illness, medical bills, inability to sleep, to eat or work in one's dwelling, separation of family members or similar disruptions of one's personal life result from the events or conditions that breach the standards of secure occupancy and essential services guaranteed by the act, rather than from the strain of preoccupation and vexation with the dispute itself.” Id. at 449; see also Garren v. Am.Mgmt. Servs. Nw. LLC, No. 3:18-CV-00595-HZ, 2019 WL 6689892, at *6 (D. Or. Dec. 6, 2019) (“Thus, following the Brewer reasoning, the Court finds that Plaintiff cannot recover emotional distress damages under [ORLTA] based on distress stemming from the dispute itself (e.g. ‘annoyance, anger, or sense of frustration'). Plaintiff can, however, recover emotional distress damages related to the loss of ‘irreplaceable personal belongings.' ”).
Here, plaintiffs allege that after receiving the termination notice in November of 2021, they attempted to, but could not, find alternative housing because of “the financial conditions of the Portland metro area housing market.” Id. ¶ 20. In other words, plaintiffs claim that defendant's retaliatory termination of the lease put them on a path to houselessness. According to plaintiffs, defendant did not pay the relocation assistance owed to plaintiffs or provide plaintiffs a description of their rights as required by Portland City Code until after plaintiffs retained an attorney and only then did so on February 10, 2022, the day that the lease was to expire. Id. ¶ 29. Plaintiffs allege that defendant's retaliatory termination of their lease caused various physical ailments and other emotional distress, including panic attacks, extreme stress that led to a diagnosis of Stage C congestive heart failure, and other physical and mental symptoms of distress. Am. Compl. ¶¶ 11-12, 20-27, 57, ECF 1-3.
Assuming the truth of plaintiffs' allegations, which is required here, the allegations in paragraph 57 are sufficient to establish entitlement to noneconomic damages. As alleged, the emotional distress is directly connected with defendant's alleged retaliatory termination of plaintiffs' lease and failure to provide relocation assistance as required by Portland City Code, and plaintiffs' looming loss of their home. See Brewer, 287 Or. at 449 (explaining that “psychological” or “emotional” impairment based on “tangible consequences such as . . . the inability to sleep, to eat or work in one's dwelling . . . or similar disruptions of one's personal life” were recoverable under the ORLTA). Therefore, defendants' motion to dismiss nee motion to strike the allegations in paragraph 57 of the Amended Complaint is denied.
2. Paragraph 61-Punitive Damages for Landlord Retaliation
Finally, defendant has moved to dismiss the allegations in paragraph 61 of the Amended Complaint, in which plaintiffs reserve the right to seek punitive damages for their claims against defendant for retaliation under the ORLTA. Mot. 6-7, ECF 11; see also Am. Compl. ¶¶ 53-61, ECF 1-3. Plaintiffs' response to defendant's motion does not address the availability of punitive damages for this claim. See Resp. 6-8, ECF 12.
Although plaintiffs did not specifically respond to defendant's motion to dismiss paragraph 61, the court retains an “obligation to examine the complaint itself to see whether it is formally sufficient to state a claim[.]” Reetz v. Mortg. Elec. Registration Sys., Inc., No. CV 08- 927-PK, 2010 WL 11579605, at *2 (D. Or. Sept. 15, 2010) (quoting Vega-Encarnacion v. Babilonia, 344 F.3d 37, 41 (1st Cir. 2003)). The analysis here is straight-forward. The Oregon Supreme Court has held that punitive damages are not available against a defendant who violates the ORLTA. Brewer, 287 Or. at 443 (“[T]he drafters of the Residential Landlord and Tenant Act” provided “differentiated provisions for compensatory and for more than compensatory damages for specified violations,” and thus there was “no justification for superimposing upon the statutory scheme an additional remedy of punitive damages, unlimited in amount, for violations of the act.”). Plaintiffs' fourth claim for relief alleges that defendant violated portions of ORLTA prohibiting retaliation, and paragraph 61 reserves the right to seek punitive damages for that conduct. Am. Compl. ¶ 53-61, ECF 1-3. Because punitive damages are not available under ORLTA, defendant's motion to dismiss with respect to paragraph 61 should be granted.
RECOMMENDATIONS
Defendant's motion to dismiss and strike (ECF 11) should be granted in part and denied in part. Defendant's motion to dismiss plaintiff's ninth claim for relief, which asserts a negligence per se claim, should be denied because the label of the claim does not control its legal sufficiency, and defendant offers no basis other than this labeling technicality for dismissing the claim. Defendant's motions to strike paragraph 57 and 61 of the Amended Complaint should be construed as a motion to dismiss under Rule 12(b)(6) for failure to state a claim. The motion to dismiss paragraph 57 should be denied because plaintiffs' Amended Complaint pleads facts sufficient to show, at least at this early phase, entitlement to noneconomic damages under the ORLTA. The motion to dismiss paragraph 61 should be granted because punitive damages are not available under the ORLTA.
SCHEDULING ORDER
These Findings and Recommendations will be referred to a district judge. Objections, if any, are due Monday, September 26, 2022. If no objections are filed, then the Findings and Recommendations will go under advisement on that date.
If objections are filed, then a response is due within 14 days after being served with a copy of the objections. When the response is due or filed, whichever date is earlier, the Findings and Recommendations will go under advisement.
NOTICE
These Findings and Recommendations are not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any Notice of Appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of a judgment.