Opinion
3:20-cv-01133-AC
05-21-2021
FINLEY CIDONE, an individual, Plaintiff/Class Representative, v. PINNACLE PROPERTY MANAGEMENT SERVICES, LLC, a foreign limited liability company, and BEL PORTLAND HOLDINGS, LLC, a foreign limited liability company, Defendants.
FINDINGS AND RECOMMENDATION
JOHN V. ACOSTA, UNITED STATES MAGISTRATE JUDGE.
Introduction
Plaintiff Finley Cidone ("Cidone") brings this putative class action against defendants Pinnacle Property Management Services, LLC ("PPM") and Bel Portland Holdings, LLC ("Bel") (collectively "Defendants"), alleging violations of one or more sections of the Oregon Residential
Landlord Tenant Act ("Act"), specifically Or. Rev. Stat. § 90.315 ("Section 90.315") and Or. Rev. Stat. § 90.302 ("Section 90.302") relating to charges assessed for utility services. Before the court is PPM's Motion for Judgment on the Pleadings ("Motion"). (PPM's Mot. for Judg., ECF No. 8 ("Mot.").) Bel joined and adopted the arguments set forth in the Motion. (Bel's Joinder, ECF No. 12 ("Bel's Joinder"), at 1-2.) Pursuant to Federal Rule of Civil Procedure ("Rule") 12(c), PPM moves to dismiss Cidone's claim for relief arising before November 19, 2018, as time-barred under Or. Rev. Stat. § 12.125 ("Section 12.125"). (Mot. at 2.) PPM also asks the court to issue an order limiting Cidone's claims for relief under Section 90.315(4)(f) to the greater of one month's rent or twice actual damages. (Mot. at 2.) The court recommends the Motion be denied in part and granted in part.
Preliminary Procedural Matter
PPM offers thirteen exhibits concurrently with the Motion (PPM's First Request for Judicial Notice, ECF No. 9 ("PPM's First Request")) and two exhibits concurrently with its Reply (PPM's Reply, ECF No. 21 ("PPM's Reply")) in support of the Motion (PPM's Second Request for Judicial Notice, ECF No. 22 ("PPM's Second Request")). Cidone offers ten exhibits concurrently with his Response (PL's Response, ECF No. 16 ("PL's Resp.")) in opposition to the Motion. (PL's Request for Judicial Notice, ECF No. 17 ("PL's Request").)
Generally, a court may not consider material beyond the complaint when deciding a Rule 12(c) motion. Fed.R.Civ.P. 12(d) (2021) (explaining that if court considers other materials, the motion is converted into a motion for summary judgment under Fed.R.Civ.P. 56); see also Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (quoting Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007) (per curiam)). However, a court may consider materials beyond the pleadings in some cases without converting a Rule 12(c) motion into a Rule 56 motion for summary judgment under two exceptions: incorporation by reference and judicial notice. Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018); Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir. 2001) (discussing that a court may take judicial notice of matters of public record without converting a motion to dismiss into a motion for summary judgment).
Judicial notice under Fed.R.Evid. ("FRE") 201 permits a court to take judicial notice of undisputed facts in matters of public record. Khoja, 899 F.3d at 999. A court may take judicial notice of an adjudicative fact that is '"not subject to reasonable dispute' if it is 'generally known,' or 'can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.'" Id., (quoting FRE 201 (b)(1)-(2)). "When a court takes judicial notice of a public record, 'it may do so not for the truth of the facts recited therein, but for the existence of the [record], which is not subject to reasonable dispute over its authenticity.'" Vesta Corp. v. Amdocs Mgmt. Ltd., 129 F.Supp.3d 1012, 1021 (D. Or. 2015) (quoting Klein v. Freedom Strategic Partners, LLC, 595 F.Supp.2d 1152, 1157 (D. Nev. 2009) (quoting Lee, 250 F.3d at 690) (alteration in original)). "Facts contained in public records are considered appropriate subjects for judicial notice." Santa Monica Food not Bombs v. City of Santa Monica, 450 F.3d 1022, 1025 (9th Cir. 2006).
All exhibits offered by PPM and Cidone are properly subject to judicial notice. Publicly available filings, including transcripts, from state court proceedings are properly the subject of judicial notice under FRE 201. Dawson v. Mahoney, 451 F.3d 550, 551 n. 1 (9th Cir. 2006) (court took judicial notice of state court orders and proceedings); Shaw v. Hahn, 56 F.3d 1128, 1129 n.l (9th Cir.), cert, denied, 516 U.S. 964 (1995) (court took judicial notice of an order from a different proceeding); Burbank Glendale-Pasadena` Airport Auth. v. City of Bur bank, 136 F.3d 1360, 1364 (9th Cir. 1998) (court took judicial notice of pleadings filed in a related state court action); Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt. Dist,, 498 F.3d 1031, 1039 n.2 (9th Cir. 2007) (court took judicial notice of a transcript from an oral argument before the California Supreme Court); Biggs v. Terhune, 334 F.3d 910, 916 n.3 (9th Cir. 2003), overruled on other grounds, Hayward v. Marshall, 603 F.3d 546 (9th Cir. 2010) (court took judicial notice of a transcript from defendant's hearing before the Board of Prison Terms and held "[m]aterials from a proceeding in another tribunal are appropriate for judicial notice.").
The court will take judicial notice of PPM's Exhibits 1-10 and 13 filed concurrently with the Motion, all of which are publicly available filings from state court proceedings in Kim v. Brittan, et al, Polk County Ct. Case No. 17CV52489 (2019) and Messner, et al. v. Cambridge Real Estate Services, Inc., et al., Multnomah County Ct. Case No. 19CV28815 (2020). The court also will take judicial notice of PPM's Exhibits 1-2 filed concurrently with its Reply, which are publicly available filings from the state court proceeding in Hathaway v. B. & J. Property Investments, Inc., et al, Marion County Ct. Case No. 19C14321 (2015). Finally, the court will take judicial notice of Cidone's Exhibits 1-10 filed concurrently with his Response, which are publicly available filings from state court proceedings in Hathaway v. B. & J. Property Investments, Inc., et al, Marion County Ct. Case No. 19C14321 (2015); Shepard Investment Group dba Umbrella Property v. Ormandy, et al, Lane County Ct. Case No. 19LT16199 (2019); Grand Ronde Village, LLC, v. Duck, Polk County Ct. Case No. 19LT08938 (2019); and Grand Ronde Village, LLC v. Williams, Polk County Case Ct. 18LT14291 (2018). (ECF No. 17)
Under FRE 201, legislative history of state statutes are properly subject to judicial notice. Territory of Alaska v. Am. Can Co., 358 U.S. 224, 226-27 (1959) (court took judicial notice of a state statute's legislative history); Chaker v. Crogan, 428 F.3d 1215, 1223 n.8 (9th Cir. 2005) (court took judicial notice of Cal. Penal Code § 148.6's legislative history). The court will take judicial notice of PPM's Exhibits 11-12 filed concurrently with the Motion, which are legislative history materials of Section 90.315(4)(f).
Factual Background
Cidone, on behalf of himself and all similarly situated persons, sues Defendants for violating Section 90.315 and Section 90.302 relating to charges assessed for utility services. (First Am. Compl., ECF No. 2 ("FAC"), ¶ 1.) The putative class consists of all tenants from thirty-five properties and approximately 5, 000 units managed by PPM. (Mot. at 7.) Cidone alleges Defendants committed various violations under Section 90.315(a)-(e) during the class period beginning January 1, 2016, until Defendants cease the unlawful violations. (FAC ¶ 12, 15.)
First, Cidone alleges Defendants required him and class members to pay for water and sewer service charges,
but failed, within 30 days after receipt of the water [and sewer] providers'] bill[s], to bill them in writing and include with that written bill either a copy of the water [and sewer] providers'] bill[s] or a statement that they may inspect the providers'] bill[s] at a reasonable time and place and that they may obtain a copy of the providers'] bill[s] by making a request to the landlord during the inspection and upon payment to the landlord for the reasonable cost of making copies.(FAC ¶ 12.) Second, Cidone claims Defendants required him and class members "to pay for garbage service charges but failed to bill them within 30 days of having received the garbage utility provider's bill." (FAC ¶ 12.) Third, Cidone alleges Defendants required him and class members,
to pay for water [sewer, and garbage] service charges, but failed to provide to them an explanation of the manner in which the utility provider assessed the water [sewer, and garbage] service charges in either the rental agreement or any bill for water [sewer, and garbage] service charges.(FAC ¶ 12.) Fourth, Cidone claims Defendants required him and class members "to pay for water, [sewer, and garbage] service when the provider[s'] bill to the landlord covered multiple tenants but failed to provide to them an explanation of the manner in which the charge for water, [sewer, and garbage] service was allocated among the Tenants." (FAC ¶ 12.) Fifth, Cidone alleges Defendants required him and class members "to pay a 'Utility Billing Fee' beyond the cost of the utility or service as billed to the landlord by the provider in violation of ORS 90.315(4)(c) and ORS 90.302(8)." (FAC ¶ 12.) In addition to injunctive relief, Cidone requests monetary damages. (FAC ¶ A-D.) Under Section 90.315(4)(f), Cidone seeks one month's periodic rent for each and every monthly violation for water, garbage, and trash services, and the illegal surcharge under Section 90.315(4)(a)-(e). (FAC ¶ A-D.)
Cidone also claims monetary damages in the alternative for the illegal surcharge. In the alternative, Cidone seeks $300 for each month Defendants violated Section 90.302(8) by charging an unauthorized fee.
On September 28, 2020, PPM filed a Rule 12(c) motion for judgment on the pleadings. (Mot. at 2.) First, PPM asks the court to issue an order dismissing Cidone's claims for relief arising before November 19, 2018, as time-barred under Section 12.125. (Mot. at 2.) Second, PPM seeks an order limiting Cidone's claims for relief under Section 90.315(4)(f) to the greater of one month's rent or twice actual damages. (Mot. at 2.)
Legal Standards
A motion for judgment on the pleadings is governed by Rule 12(c), which states, "[a]fter the pleadings are closed-but early enough not to delay the trial-a party may move for judgment on the pleadings." The purpose of a Rule 12(c) motion is to challenge the sufficiency of the opposing party's pleadings, and the court applies the same standard as a motion to dismiss under Rule 12(b)(6). Chavez v. United States, 683 F.3d 1102, 1108-09 (9th Cir. 2012). Accordingly, judgment on the pleadings is appropriate when, even if all material facts in the pleading under attack are true, the moving party is entitled to judgment as a matter of law. Hal Roach Studios, Inc. v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1550 (9th Cir. 1989).
Although the court must assume as true all facts asserted in the pleading, it need not accept as true any legal conclusions set forth in the pleading. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (refining the approach created in Bell Atl Corp. v. Twombly, 550 U.S. 544 (2007), to determine sufficiency of pleadings under Rule 8 and related motions for dismissal).
Discussion
I. The Discovery Rule Applies to Section 12.125
PPM moves to dismiss Cidone's class claims arising before November 19, 2018, as time-barred under Section 12.125. (Mot. at 2.) Cidone filed this lawsuit on November 19, 2019, claiming PPM violated Section 90.315 and Section 90.302 from a class period starting January 1, 2016. (Mot. at 14.) PPM counters that Cidone's claims prior to November 19, 2018, are time-barred because Section 12.125 states, "[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year." (Mot. at 14 (emphasis added).) PPM argues a start date of January 1, 2016, "improperly captures tenants whose leases expired before November 19, 2018 and also improperly captures residential properties that PPM may have stopped managing before November 19, 2018." (Mot. at 14.)
Cidone, relying on the discovery rule, claims he properly pleaded a class period arising as of January 1, 2016, because "[a]t no time before May 2019 did he discover[], nor should he reasonably have discovered the unlawful nature of Defendants' conduct resulting in the legal injuries and harm at issue in this case." (PL's Resp., at 4.) Cidone asserts, based on his analysis of legislative intent, the discovery rule applies to Section 12.125. (PL's Resp., at 5.) The parties agree Section 12.125 is the proper statute of limitations for this case, but they disagree whether the discovery rule applies to the statute. Thus, the court must determine whether the discovery rule applies to Section 12.125.
The discovery rule is "'a rule of interpretation of statutes of limitation that has the effect of tolling the commencement of such statutes under certain circumstances.'" Rice v. Rabb, 354 Or. 721, 725 (2014) (quoting FDIC v. Smith, 328 Or. 420, 428 (1999)). Under the discovery rule, the period of limitations commences from the earlier of: "'(1) the date of the plaintiffs actual discovery of injury; or (2) the date when a person exercising reasonable case should have discovered the injury, including learning facts that an inquiry would have disclosed.'" Id. at 725 (quoting Greene v. Legacy Emanuel Hospt., 335 Or. 115, 123 (2002) (emphasis in original)). If the discovery rule applies to a statute of limitations, a defendant will prevail on its statute of limitations defense if the defendant proves "that before [the applicable date] the plaintiff either knew, or in the exercise of reasonable care should have known, facts that would make a reasonable person aware of a substantial possibility that the defendant's alleged [tortious conduct] caused the plaintiff some harm." Uniform Civil Jury Instruction ("UCJI") 17.01. "The existence of a discovery rule cannot be assumed, but rather must be embodied in the applicable statute of limitations." Rice, 354 Or. at 726 (citing Galdhart v. Oregon Vineyard Supply Co., 332 Or. 226, 230 (2001)). To determine whether the discovery rule applies to a statute of limitations, the court employs the statutory methodology established in State v. Gaines, 346 Or. 160 (2009). Rice, 354 Or. at 726.
The first step for interpreting a statute is an examination of the statute's text and context. Gaines, 346 Or. at 171 (citing Portland Gen. Elec. Co. v. Bureau of Lab. & Indus., 317 Or. 606, 610-11 (1993)). To determine the legislative intent of a statute, the court:
considers rules of construction of the statutory text that bear directly on how to read the text. Some of those rules are mandated by statute, including, for example, the statutory enjoinder "not to insert what has been omitted, or to omit what has been inserted." Others are found in the case law, including, for example, the rule that words of common usage typically should be given their plain, natural, and ordinary meaning. Also at the first level of analysis, the court considers the context of the statutory provision at issue, which includes other provisions of the same statute and other related statutes. Just as with the court's consideration of the text of a statute, the court utilizes rules of construction that bear directly on the interpretation of the statutory provision in context. Some of those rules are mandated by statute, including, for example, the principles that "where there are several provisions or particulars such construction is, if possible, to be adopted as will give effect to all," and that "a particular intent shall control a general one that is inconsistent with it[.]" Other such rules of construction are found in case law, including, for example, the rules that use of a term in one section and not in another section of the same statute indicates a purposeful omission, and that use of the same term throughout a statute indicates that the term has the same meaning throughout the statute.Portland Gen, Elec. Co., 317 Or. at 611 (internal citations omitted).
Ambiguity in the text of the statute is not required as a predicate to the second step of considering pertinent legislative history. Gaines, 346 Or. at 171 -72. "[A] party is free to proffer legislative history to the court, and the court will consult it after examining text and context, even if the court does not perceive any ambiguity in the statute's text, where that legislative history appears useful to the court's analysis." Id. at 172. However, "the extent of the court's consideration of that history, and the evaluative weight that the court gives it, is for the court to determine." Id. Legislative inaction can be a "weak reed upon which to lean in determining legislative intent" but it should not be ignored. Berry, 245 Or. at 311. The court can use legislative history to:
confirm seemingly plain meaning and even to illuminate it; a party also may use legislative history to attempt to convince a court that superficially clear language actually is not so plain at all-that is, that there is a kind of latent ambiguity in the statute. For those or similar purposes, whether the court will conclude that the particular legislative history on which a party relies is of assistance in determining legislative intent will depend on the substance and probative quality of the legislative history itself.Gaines, 346 Or. at 172. The court decides the weight to give legislative history, but "when the text of a statute is truly capable of having only one meaning, no weight can be given to legislative history that suggests-or even confirms-that legislators intended something different." Id. Lastly, "if the legislature's intent remains unclear after examining text, context, and legislative history, the court may resort to general maxims of statutory construction to aid in resolving the remaining uncertainty." Id. at 172.
There are no District of Oregon cases discussing whether the discovery rule applies to Section 12.125, but two Oregon Circuit Court cases do address whether the discovery rule applies to Section 12.125. See Kim v. Brittan, et al, Polk Cnty. Ct. Case No. 17CV52489 (2019) (holding the discovery rule did not apply to Section 12.125); Hathaway v. B. & J. Prop. Investments, Inc., et al, Marion County Ct. Case No. 19C14321 (2015) (holding the discovery rule applied to toll Section 12.125 explaining whether claims under the Act are time-barred is determined by the trier of fact on an individual class member basis). Although these decisions are not binding on this court, the court may rely on such cases to the extent the circuit court's reasoning is persuasive. See Spinner Crop. v. Princeville Dev. Corp., 849 F.2d 388, 390 n.2 (9th Cir. 1988) ("The unreported decision of a state trial court, however, is not binding on us, although we may rely on it to the extent its reasoning is persuasive." (citation omitted)). In the absence of governing case law, the court applies '"the statutory [interpretation] methodology established in [Gaines], to determine whether the legislature intended to incorporate a discovery rule in the pertinent statute of limitations.'" Monaco v. City of Cornelius, No. 03:13-ov-02129-HZ, 2015 WL 1538786, at *21 (D. Or. Apr. 6, 2015) (quoting Rice, 354 Or. at 726).
See PPM's First Request Exhibits 1-4); (PPM's Second Request Exhibits 1-2); (PL's Request Exhibit 1.
In Rice v. Rabb, 354 Or. 721, 723 (2014), the issue was "whether the six-year statute of limitations applicable to conversion and replevin claims under ORS 12.080(4) incorporate[d] a discovery rule." Under Or. Rev. Stat. § 12.080(4) ("Section 12.080(4)"), "[a]n action for taking, detaining or injuring personal property, including an action for the specific recovery thereof, excepting an action mentioned in ORS 12.137; shall be commenced within six years." The defendant argued the six-year limitation period began to run when the defendant committed the conversion. Id., at 724. The plaintiff, however, claimed Section 12.080(4) incorporated a discovery rule by application of Or. Rev. Stat. § 12.010 ("Section 12.010") which states "[a]ctions shall only be commenced within the periods prescribed in this chapter, after the cause of action shall have accrued, except where a different limitation is prescribed by statute." Id., at 725. Because the Oregon Supreme Court previously has found a discovery rule is incorporated into statutes of limitations when the "applicable statute of limitations fell under the purview of ORS 12.010," the plaintiff argued her cause of action did not "accrue" until she had actual or constructive knowledge the defendant had committed the conversion. Id. at 730. After applying Gaines's statutory methodology to Section 12.080(4), the court held the plaintiffs allegations adequately invoked the discovery rule. Id.
First, the Rabb court recognized Section 12.010 and Section 12.080(4) have "been part of Oregon law for more than a century and have remained largely the same." Id. at 726. Second, the court began with the text of Section 12.080(4) and found it did not expressly incorporate the discovery rule. Id. However, the court found a "discovery rule applie[d] to ORS 12.080(4) because that statute falls within the purview of ORS 12.010." Id., at 728. The Rice court read Section 12.080(4) in tandem with Section 12.010's general directive and found the six-year limitations period started to run when the cause of action accrued. Id. at 728. The court then held a cause of action "accrues" under Section 12.080(4) when the '"plaintiff obtained knowledge, or reasonably should have obtained knowledge of the tort committed upon her person by [the] defendant.'" Id. at 728 (quoting Berry v. Branner, 245 Or. 307, 316 (1966)).
Third, the Rice court recognized that in prior cases the court generally had found a discovery rule applies to a statute of limitation if it falls under the purview of ORS 12.010. Id. at 730. Further, the court acknowledged that "in cases in which the court has found that the legislature did not intend a discovery rule to apply, the applicable statutes generally used terms other than 'accrue' for designating when the cause of action may be maintained." Id. at 730; see Gladhart, 332 Or. at 226 (statute of limitations used the word "occurs," which, under the ordinary meaning of that term, shows the cause of action runs from the time the damage occurred and not from the discovery of that damage); Huff v. Great W. See Co., 322 Or. 457, 463-64 (1996) (statute of limitations used the word "occurrence," and legislative history indicated an intent to exclude the discovery rule); Hammond v. Hammond, 296 Or.App. 321, 331-336 (2019) (court held the discovery rule applied to the limitations rule where the statute of limitations did not specify the event that triggered the running of the limitation period, but the limitations rule fell under the purview of Section 12.010 and there is well-established law about when an action accrued under adverse possession.); Moore v. Mutual Enumclaw Ins. Co., 317 Or. 235, 245-46 (1993) (statute of limitations stated claims would be barred if not commenced more than one year after the "inception of loss" and court held this phrase was "intended to refer to the occurrence of the event giving rise to the claim of liability and not to the accrual of liability" and thus did not carry the same effect of having the phrase "accrue" in the statute.); Monico, 2015 WL 1538786, at *22 (court held Or. Rev. Stat. § 659A.875(6) did not have a discovery rule because it lacked an express discovery provision and contained the word "occurrence.").
Rice's reasoning informs the decision here and this court finds the discovery rule applies to Section 12.125. Section 12.125 provides that "[a]n action arising under a rental agreement or ORS chapter 90 shall be commenced within one year." The text of Section 12.125 does not expressly include the discovery rule, but the section falls within the purview of Section 12.010 which provides "[a]ctions shall only be commenced within the periods prescribed in this chapter, after the cause of action shall have accrued, except where a different limitation is prescribed by statute." Reading Section 12.125 and Section 12.010 in tandem, as did the Rice court, the one-year statute of limitations under Section 12.125 begins to run when the cause of action "accrues;" in other words, when the "plaintiff obtained knowledge, or reasonably should have obtained knowledge of the tort committed by the defendant." Rice, 354 Or. at 728. Additionally, as in Rice, this court is persuaded to find a discovery rule applies to Section 12.125 because Section 12.010 uses "accrue" instead of "occurrence" or "inception of loss," terms which the Oregon Supreme Court has found do not encompass a discovery rule.
The legislative history of Section 12.125 supports this reading. The purpose of the Act is to provide an aggrieved party, landlord, or tenant, with "an appropriate legal remedy for his grievance." Minutes, Senate Local Government and Urban Affairs Committee, S.B. 159, 1973, at 640; see also Minutes, Senate Local Government and Urban Affairs Committee, S.B. 159, 1973, at 202 (the Act "shall be liberally construed and applied to promote its underlying purposes and policies, (2) [u]nderlying purposes and policies of thus Act are: (a) [t]o simplify, clarify, modernize and revise the law governing the rental of dwelling units and the rights and obligations of landlords and tenants; (b) [t]o encourage landlords and tenants to maintain and improve the quality of housing[.]"). Applying a discovery rule to Section 12.125 furthers these purposes.
PPM argues that because the violations of Section 90.315(4) and Section 90.302 occur simultaneously with the harm to the tenant, "no 'discovery period' is needed for the harm to mature." (PPM's Reply, at 4.) PPM contends statutory causes of action under the Chapter 90 of the Act are "black and white" because a utility bill and fee charged by a landlord either complies with Section 90.315(4) and Section 90.302 or it does not. (PPM's Reply, at 4.) In Rice, the defendant asserted a similar argument, that "an action for conversion and replevin is the type of intentional tort that is immediately ascertainable on the commission of the wrong and, accordingly, the legislature would have intended the statute of limitations to begin to run at the time of the tortious act." 354 Or. at 732. The Rice court disagreed with the defendant's argument, citing Doe v. Lake Oswego School District, 353 Or. 321, 331 (2013), where the court held a battery claim did not accrue when the battery itself occurred, but rather when the plaintiff discovered the tortious nature of the conduct. Rice, 354 Or. at 733. Thus, PPM's argument that no 'discovery period' is needed for the harm to mature is misplaced.
Accordingly, Section 12.125 is subject to the discovery rule. The court recommends PPM's Motion on this issue be denied.
IL Damages Under Section 90.3 15(4)(f) are Limited to the Greater of One Month's Rent or Twice Actual Damages
Under Section 90.315(4)(f), "[i]f a landlord fails to comply with paragraph (a), (b), (c), or (d) of this subsection, the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater." Cidone claims each class member "is entitled to a single month's rent for each utility charge for which there was a violation." (Pl's Resp., at 9.) Cidone also asserts each count of water, sewer, garbage, and surcharge are separate violations that renew each billing cycle. (Pl's Resp., at 9.) Thus, Cidone's formula for calculating damages under Section 90.315(4)(f) is monthly rent x four violations x number of months Defendants committed violations x 5, 000 apartment units. PPM responds that Cidone's calculation has no basis as a matter of law because Section 90.315(4)(f) caps the statutory damages available to a tenant to the greater of one month's periodic rent or twice their actual damages regardless of how many times Defendants violated the statute. (Mot. at 7). PPM argues Cidone's calculation of damages would lead to "the absurd result of an award of hundreds of millions of dollars" for purely technical violations. (Mot. at 8.)
The manner in which damages are calculated under Section 90.315(4)(f) is a question of statutory interpretation. There are no District of Oregon cases interpreting Section 90.315(4)(f), but some Oregon Circuit Court cases do address Section 90.315(4)(f). See Messner v. Cambridge Real Est. Services, Inc., Multnomah Cnty. Ct. Case No. 19CV28815 (2020) (granting the defendants' Or. Rev. Civ. P. ("ORCP") 21 A(8) motion to dismiss plaintiffs' prayer for damages but granting plaintiffs leave to seek a cumulative maximum of double the their actual damages or a single month's rent, whichever is greater); Kim v. Brittan, et al, Polk Cnty. Ct. Case No. 17CV52489 (2019) (denied the defendants' ORCP 21 E motion to strike the plaintiffs' allegations that damages should be calculated for each month the landlord violated various portions of Section 90.315); Shepard Inv. Group dba Umbrella Property v. Ormandy, et al, Lane Cnty. Ct. Case No. 19LT16199 (2019) (awarded the plaintiff damages of one month's rent for each month the defendant violated Section 90.315(4)); Hathaway v. B. & J. Prop. Investments, Inc., etal, Marion County Ct. Case No. 19C14321 (2015) (held damages under the Act are determined based on individual inquiry and must be proven for each individual class member). Again, these circuit court decisions are not binding on this court, but the court may rely on them to the extent the circuit courts' reasoning is persuasive. See Spinner Crop., 849 F.2d at 390 n.2. Absent governing case law, the issue whether Section 90.315(4)(f) provides damages for each violation every month or only once regardless of the number of violations, this court applies the Gaines's statutory interpretation methodology. See 346 Or. at 171-72.
PPM's First Request Exhibits 1-13); (PPM's Second Request Exhibit 1-2); (PL's Request Exhibits 1-10. Additionally, the parties in Grand Ronde Village, LLC v. Duck, Polk Cnty. Ct. Case No. 19LT08938 (2019), sad Grand Ronde Village, LLC v. Williams, Duck Polk Cnty. Ct. Case No. 18LT14291 (2018), address damages under Section 90.315(4)(f), but the courts failed to clarify how the damages were calculated in the general judgment.
First, Cidone's interpretation of Section 90.315(4)(f) violates the principle that the court, when interpreting a statute, must not "insert what has been omitted, or [] omit what has been inserted." Or. Rev. Stat. § 174.010. Cidone's interpretation of Section 90.315(4)(f) inserts "each and every time" into the statute to allow a plaintiff to recover damages for each violation every time the defendant violates the statute. In Messner, the court rejected this approach. There, plaintiff alleged he and the putative class were entitled, under Section 90.315(4)(f), to recover the greater of one month's rent or twice the amount wrongfully charged for each month the defendants violated Section 90.315(4)(b)(B), (C), and (c). (PPM's First Request Exhibit 6, at 12-13.) The court granted defendant's ORCP 21 A(8) motion to dismiss the plaintiffs damages prayer and allowed plaintiffs to replead their prayer for damages as "a cumulative maximum of double the Named Plaintiffs' actual damages or a single month's rent, whichever is greater." (PPM's First Request Exhibit 10, at 2.) The court stated: "there are numerous reasons why the plain language of the statute does not indicate to me that it means that you should be able to recover for a violation that occurs each month. One is that is just doesn't say that in the statue. It just doesn't say, 'for each violation.'" (PPM's First Request Exhibit 9, at 6.)
Second, this court considers the context of Section 90.315(4)(f) and related statues. Gaines, 346 Or. at 171. Section 90.315(4)(f) is qualified by the general directive that remedies under Chapter 90 of the Act "shall be so administered that an aggrieved party may recover appropriate damages." Or. Rev. Stat. § 90.125(1) (emphasis added). The legislature did not define "appropriate damages," but the Oregon Supreme Court's decision in Brewer v. Erwin, 287 Or. 435, 437-38 (1979), addressed this question when considering whether "appropriate damages" under the Act included punitive damages. The Brewer court found that the legislature did not intend penal damages to apply universally to all statutory provisions of the Act as "appropriate damages." Id. at 443; (citing URLTA, s. 1.105 (3d Draft, April 1972); H.B. 2424, 1973, s 5.). Rather, the court observed that the legislature knew how to specifically include punitive damages in a statute, as evidenced by a number of statutory provisions in the Act. Id., at 441-43; Or. Rev. Stat. § 90.245(2) ("the tenant may recover in addition to the actual damages of the tenant an amount up to three months' periodic rent."); Or. Rev. Stat. § 90.300(16) ("Section 90.300(16)") ("the tenant may recover the money due in an amount equal to twice the amount: (a) [w]ithheld without a written accounting under subsection (12) of this section; or (b)[w]ith held in bad faith."); Or. Rev. Stat. § 90.425(17)(a) (the tenant "may recover from the landlord up to twice the actual damages sustained by the tenant."); Or. Rev. Stat. § 90.365 (the tenant may "[r]ecover damages based upon the diminution in the fair rental value of the dwelling unit[.]"). The Brewer court held "when a statute includes such differentiated provisions for compensatory and for more than compensatory damages for specific violations we find no justification for superimposing upon the statutory scheme an additional remedy of punitive damages, unlimited in amount, for violations of the act." Id. at 443. The court stated that the key to determining damages when statutory indications are lacking is to "determine what kind of harm, in a setting of a normal residential rental transaction, can reasonably be said to lie within the contemplation of the protective provision of the act upon which the claim is found." Id. at 446. And the Brewer court recognized Section 90.300(16) was one of those provisions of the Act that specifically provided for punitive damages. Id. at 443. Section 90.300(16) and Section 90.315(4)(f) are very similar in their wording and purpose.
In Waldvogel v. Jones, 196 Or.App. 446, 451 (1985), the defendant-landlord withheld the plaintiff-tenant's security deposit of $400 for more than thirty-one days without providing a written accounting required by Section 90.300(16). The defendant claimed he gave the plaintiff an accounting a few days after the thirty-one days allowed by the statute had passed. Waldvogel v. Jones, No. A122100, 2004 WL 7309992, at *l (Or. App. Apr. 30, 2004). The court awarded the plaintiff $800, twice the security deposit, Waldvogel, 196 Or.App. at 450, but did not award the plaintiff twice the amount recoverable for each day, after the thirty-one day mark, the defendant violated the statute by retaining plaintiffs security deposit without providing a written accounting. Id.; see also Beckett v. Olson, 75 Or.App. 610, 614 (1985) (the court awarded the plaintiff twice the amount of her security deposit when the defendant held onto her security deposit approximately twenty days past the thirty days prescribed by Section 90.300(16) without a written accounting.).
Section 90.300(16) states: "If the landlord fails to comply with subsection (13) of this section or if the landlord in bad faith fails to return all or any portion of any prepaid rent or security deposit due to the tenant under this chapter or the rental agreement, the tenant may recover the money due in an amount equal to twice the amount: (a) Withheld without a written accounting under subsection (12) of this section; or (b) Withheld in bad faith."
The court's opinion does not contain this fact, but the defendant's appellate brief does. The issue before the Waldvogel court was whether the trial court had discretion under Or. Rev. Stat. § 90.300(14) to decline awarding twice the amount of the security deposit to the plaintiff. Thus, although this fact was not necessary to the court's holding, the case still is instructive for the statutory interpretation of Section 90.315(4)(f).
Here, Section 90.315(4)(f) and Section 90.300(16) are similar in language and purpose. First, Section 90.315(4)(f) allows a tenant to recover "an amount equal to" the greater of "one month's periodic rent or twice the amount wrongfully charged to the tenant." Section 90.300(16) allows a tenant to recover "an amount equal to twice the amount" of the money due. Second, both statutes address technical violations of a landlord's obligation to provide materials in writing, and both prohibit landlords from overcharging tenants and withholding security deposits. See Section 90.315(4); Section 90.300. Third, both statutes allow tenants to recover damages that are twice the amount of what the landlords wrongfully charged them or took in violation of the statute. See Section 90.315(4)(f) ("the tenant may recover from the landlord an amount equal to one month's periodic rent or twice the amount wrongfully charged to the tenant, whichever is greater." (emphasis added)); Section 90.300(16) ("the tenant may recover the money due in an amount equal to twice the amount..." (emphasis added)).
Moreover, the purpose of both statutes is to punish a landlord for not fulfilling their statutory obligations. Oregon courts expressly acknowledged the "obvious purpose" of Section 90.300(16) is to "encourage landlords to fulfill their statutory duties by establishing an automatic penalty for their failure to do so." Beckett, 75 Or.App. at 614. Legislative history establishes Section 90.315 was also intended to punish a landlord for failing to comply with its provisions. The legislature originally added the language of Section 90.315(4)(f) in House Bill 3098 as Or. Rev. Stat. § 90.3l5(4)(e). H.B. 3098, 7Oth Leg., (Or. 1999), at 13. The comments state:
The Beckett court considered OR. REV. STAT. 91.760, which was renumbered to OR. REV. STAT. 90.300 in 1989.
Section 18. Amends ORS 90.315, regarding utility or services charges that a landlord may pass directly through to a tenant from the utility provider, without treating such a charge as rent. (Increases in rent require a 30 day written notice; nonpayment supports a 72 hour termination notice.) One small amendment is to expand the world of such charges to include internet access or usage, an increasingly common practice ... The amendment provides a penalty for landlord noncompliance. The penalty provision provides for an amount equal to one month's rent as a possible penalty, reflecting an assumption that week-to-week tenancies are unlikely to have utility markups.Comments on House Bill 3098A, (Or. 1999), at 9 (emphasis added). Thus, Section 90.3l5's legislative history reveals the statute provides a penalty for a landlord's noncompliance with its provisions, similar to Section 90.300(16).
While Section 90.315(4)(f) provides for the greater of two options for recovery, this fact does not make it dissimilar to Section 90.300(16). Under Section 90.315(4), possible scenarios exist where a landlord could violate Section 90.315(4)(b)(B) but the tenant does not suffer any actual monetary harm, such as not providing a written explanation of how the provider assessed his utility service charge. Under Section 90.315(4)(f), such a tenant would receive one month's rent because it would be greater than the amount wrongfully charged to him because he was not wrongfully charged any amount. Thus, the court finds 90.315(4)(f) and Section 90.300(16) are essentially the same in text, context, and purpose, and concludes that both statutes provide for punitive damages, to be awarded once and not for each and every time the landlord violates the statute.
General maxims of statutory construction lead to the same conclusion, specifically, that courts will construe statutes to avoid absurd results. State v. Vasquez-Rubio, 323 Or. 275, 282-83 ("the court will refuse to adopt the meaning that would lead to an absurd result that is inconsistent with the apparent policy of the legislation as a whole."). Construing Section 90.315(4)(f) to allow damages to renew each billing period, as Cidone argues, would lead to an enormous punishment for technical violations that may not cause actual monetary harm to each tenant. For example, if rent was $1,000 per month, the damages could total $400,000,000. ($1,000 x four violations x twenty months x 5, 000 apartment units). This calculation provides a massive windfall that not only constitutes an absurd result but also is unnecessary to enforce the statute's purposes. Like the Brewer court, this court finds no justification for superimposing on Section 90.315(4)(f) a scheme for punitive damages under Cidone's calculations, unlimited in amount, for violating Section 90.315(4)(f), when the statute is silent as to such calculation. See Brewer, 287 Or. at 443. PPM's request to limit Cidone's damages under Section 90.3 l5(4)(f) to the greater of one month's rent or twice actual damages should be granted.
This calculation is conservative, as it is based on defendants' contention that the class period should start November 18, 2018.
Conclusion
PPM's Motion (ECF No. 8) should be DENIED IN PART and GRANTED IN PART, as explained herein.
Scheduling Order
The above Findings and Recommendation will be referred to a United States District Court Judge for review. Objections, if any, are due in seventeen (17) days. If no objections are filed, then the Findings and Recommendation will go under advisement on that date.
If objections are filed, then a response is due within fourteen (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 Recommendation will go under advisement.