No. 20 July 20, 2023 285
IN THE SUPREME COURT OF THE
STATE OF OREGON
SHEPARD INVESTMENT GROUP LLC,
an Oregon limited liability company,
dba Umbrella Properties Management,
Respondent on Review,
v.
Bret Lee ORMANDY,
an individual and all other occupants,
Petitioner on Review.
(CC 19LT16199) (CA A173257) (SC S069726)
On review from the Court of Appeals.*
Argued and submitted March 6, 2023, at Lewis & Clark
Law School, Portland, Oregon.
Matthew G. Shepard, Salem, argued the cause and filed
the brief for petitioner on review.
John R. Roberts, Arnold Gallagher P.C., Eugene, argued
the cause and filed the brief for respondent on review.
Kristen G. Williams, Williams Weyand Law, LLC,
McMinnville, filed the briefs for amicus curiae Oregon Trial
Lawyers Association.
Before Flynn, Chief Justice, and Duncan, Garrett,
DeHoog, Bushong and James, Justices, and Nakamoto,
Senior Judge, Justice pro tempore.
JAMES, J.
The decision of the Court of Appeals is affirmed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
Nakamoto, S. J., dissented and filed an opinion.
______________
* Appeal from Lane County Circuit Court, Kamala H. Shugar, Judge. 320
Or App 521,
514 P3d 1125 (2022).
286 Shepard Investment Group LLC v. Ormandy
Cite as
371 Or 285 (2023) 287
JAMES, J.
In this forceable entry and detainer (FED) action,
we are asked to determine the proper calculation of damages that may be awarded to a tenant, following multiple
instances of landlord noncompliance with certain utility billing requirements that repeated each month, over a
series of months. ORS 90.315, part of the Oregon Residential
Landlord and Tenant Act (ORLTA), governs the inclusion of
utility or public service charges, such as for sewer or water
service, in rental agreements. Subsection (2) of that statute
concerns disclosure, requiring landlords to “disclose to the
tenant in writing at or before the commencement of the tenancy any utility or service that the tenant pays directly to
a utility or service provider that benefits, directly, the landlord or other tenants.” Subsection (4) concerns pass-through
billing, stating that a landlord “may require a tenant to pay
to the landlord a utility or service charge or a public service
charge that has been billed by a utility or service provider
to the landlord.” However, paragraph (4)(b) conditions pass-through billing upon a number of procedural requirements,
such as billing the tenant within 30 days, setting out the
utility or service charge separately from rent, and providing copies of the service provider’s bill or an opportunity to
inspect it. If a landlord engages in pass-through billing for
public service charges without having met all of the conditions of ORS 90.315(4), a tenant may recover “an amount
equal to one month’s periodic rent or twice the amount
wrongfully charged to the tenant, whichever is greater.”
ORS 90.315(4)(f).
Here, after plaintiff (landlord) brought an FED
action against defendant (tenant) to recover possession of
the landlord’s premises, tenant alleged a counterclaim that
landlord had failed to comply with certain utility billing
requirements found in ORS 90.315(4)(b). The trial court
agreed with tenant, concluding that landlord had committed 12 separate violations—one per month over the 12
months within the one-year statute of limitations that governs ORLTA actions, ORS 12.125—and awarded tenant
statutory damages in an amount equal to 12 months of
rent. On landlord’s appeal, the Court of Appeals reversed,
concluding that the plain text of ORS 90.315(4)(f) showed
288 Shepard Investment Group LLC v. Ormandy
that the legislature had not intended for each landlord billing violation to be subject to a separate sanction. Shepard
Investment Group LLC v. Ormandy, 320 Or App 521, 531,
514 P3d 1125 (2022). We allowed review and now affirm the
decision of the Court of Appeals and reverse the judgment of
the trial court.
The relevant facts are not in dispute. Landlord owns
the Fairfield Village Apartments, and tenant has rented a
residential unit in that complex since 2008. In 2013, landlord began charging residents, including tenant, a monthly
$40 flat fee for several utilities, including water, sewer, and
garbage services. Landlord incorporated a corresponding
provision into tenant’s subsequent rental agreements.
In November 2019, tenant defaulted on that month’s
rent charges, causing landlord to issue a statutory “72-hour
notice” on November 8. The notice set forth landlord’s intent
to terminate tenant’s rental agreement for nonpayment of
rent. Landlord subsequently initiated this FED action on
November 13. Tenant counterclaimed, alleging that landlord had violated the utility billing requirements set forth in
ORS 90.315(4)(b). Tenant specifically alleged that, over the
previous year, landlord had failed to (1) timely bill him in
writing for each month’s utility charges, as required under
ORS 90.315(4)(b)(A); and (2) provide him with an explanation of the “pass through charges” in either the written
rental agreement or separate billings, as required under
ORS 90.315(4)(b)(B). Tenant claimed that, because landlord had failed to comply with ORS 90.315(4)(b) once each
month over a year-long period, he was entitled to recover one
month’s “periodic rent,” ORS 90.315(4)(f), for each of landlord’s monthly violations.
The trial court made several factual findings:
(1) tenant’s monthly rent was $740 for the first 10 months
and $825 for the final two months; (2) over the year-long
period, landlord had charged tenant $40 monthly for utilities, totaling $480, but never had sent tenant corresponding written or electronic bills for those charges; (3) landlord
never offered or provided the original utility bills for tenant’s
inspection; and (4) landlord had failed to explain, in either
the rental agreement or bills, both how the utility providers
Cite as 371 Or 285 (2023) 289
assessed their charges and how landlord distributed those
charges among Fairfield tenants. The court did not find
that landlord had overbilled or fraudulently represented the
value of the utility and service charges. However, the court
did find that landlord had failed to explain the pass-through
billing arrangement in the tenant’s rental agreement.
Ultimately, the trial court concluded that landlord
had violated ORS 90.315(4)(b) 12 times, once each month
over the course of a year. As noted, the maximum statutorily permissible award under ORS 90.315(4)(f) is an amount
equal to one month’s periodic rent or “twice the amount
wrongfully charged,” whichever is greater. Applying that
calculation to the amount actually billed to tenant over the
previous year would have totaled only $960 ($480 for the
billed utilities at $40 per month, for 12 months, then doubled). However, the court awarded tenant $9,050 in statutory damages, concluding that ORS 90.315(4)(f) required an
award totaling one month of rent awarded for each separate
monthly utility billing. The court awarded $740 per month
for the first 10 months and $825 per month for the last two
months, totaling $9,050. The court then deducted tenant’s
unpaid rent for November (in addition to other unpaid
charges), leaving tenant with a damages award of $7,195.
Tenant was later awarded an additional $5,068 in costs and
attorney fees through a supplemental judgment. Landlord
appealed.
Before the Court of Appeals, the parties presented
arguments mirroring their positions below. Landlord
asserted that ORS 90.315(4)(f) is not a damages provision
that should be applied “per violation,” that the legislature
clearly includes “per violation” language when that is its
intent, and that ORS 90.315(4)(f) punishes “a course of conduct which may consist of one or many related acts occurring
over an undefined period of time.” Landlord further argued
that the number of wrongful charges when a landlord is in
noncompliance with ORS 90.315(4)(b) is immaterial. Rather,
according to landlord, the statutory intent is to encourage
landlords to comply by attaching a penalty for statutory violations sufficient to encourage landlords to take remedial
action once they become aware of noncompliance with a
290 Shepard Investment Group LLC v. Ormandy
provision of the ORLTA. Tenant responded that the intent
of ORLTA is to penalize landlords for each act of noncompliance and that, if damages are not imposed for each discrete violation, then landlords will be incentivized to remain
noncompliant rather than addressing violations when they
arise. The Court of Appeals agreed with landlord, concluding that landlord’s reading comported with the plain text of
ORS 90.315(4)(f) because the legislature had chosen wording
that “[did] not direct a deciding court to award ‘one month’s
periodic rent or twice the amount wrongfully charged to the
tenant, whichever is greater’ for each and every separate
noncompliant bill sent by a landlord.” Shepard Investment,
320 Or App at 531. Consistently with its understanding
of the statute, that court held that tenant was entitled to
“twice the amount wrongfully charged,” totaling $960, and
it therefore reversed and remanded the trial court’s ruling.
Id. at 532-33. We allowed review.
The question before us is one of statutory interpretation, which we resolve by applying our usual methodology of considering text, context, and any helpful legislative
history. State v. Gaines, 346 Or 160, 171-72,
206 P3d 1042
(2009). A statute’s context includes, among other things,
its immediate context—the phrase or sentence in which
the term appears—and its broader context, which includes
other statutes on the same subject. See PGE v. Bureau of
Labor and Industries,
317 Or 606, 611,
859 P2d 1143 (1993).
We turn now to applying those principles to ORS
90.315, the statute at issue, beginning with a brief overview
of the ORLTA. In 1973, the legislature enacted the ORLTA,
originally modeled after the Uniform Residential Landlord
and Tenant Act to “clarify and restate the rights and obligations of tenants and landlords.” L & M Investment Co. v.
Morrison, 286 Or 397, 405,
594 P2d 1238 (1979). The ORLTA
imposes obligations on, and creates remedies for, both landlords and tenants. As, the Court of Appeals explained, the
monthly billing transparency requirements found in ORS
90.315(4)(b) were enacted in 2015 (Or Laws 2015, ch 388,
§ 8); the court succinctly described them as “the product of a
coalition of landlord and tenant advocate groups” seeking to
draft legislation in unison. Shepard Investment,
320 Or App
at 526.
Cite as
371 Or 285 (2023) 291
ORS 90.315 imposes obligations on landlords relative to utility or service charges. In 1997, the legislature
added subsection (4) to that statute, permitting a landlord to
pass utility or service charges on to tenants without treating such charges as rent (pass-through billing), but only
if the landlord conforms to the specific requirements set
out in subsection (4) when doing so. Or Laws 1997, ch 577,
§ 16. In 1999, the legislature added the penalty provision at
issue here—discussed further below—to subsection (4). Or
Laws 1999, ch 603, § 18. ORS 90.315(4) was not again substantively amended until 2015, when the legislature added
stricter disclosure requirements related to service or utility
charges. Or Laws 2015, ch 388, § 8. The legislature has not
amended that statute since that time.
Turning to the text of subsection (4) of ORS 90.315,
paragraph (a) permits landlords to bill tenants for utility or
service charges on a pass-through basis, and it requires that
a landlord describe the pass-through charges in the rental
agreement.1 ORS 90.315(4)(b)(A) and (B), the provisions giving rise to the parties’ dispute here, provide as follows:
“(b)(A) If a rental agreement provides that a landlord
may require a tenant to pay a utility or service charge, the
landlord must bill the tenant in writing for the utility or
service charge within 30 days after receipt of the provider’s bill. If the landlord includes in the bill to the tenant
a statement of the rent due, the landlord must separately
and distinctly state the amount of the rent and the amount
of the utility or service charge.
“(B) The landlord must provide to the tenant, in the
written rental agreement or in a bill to the tenant, an
explanation of:
1
ORS 90.315(4)(a) provides:
“[With exceptions for certain tenancies,] if a written rental agreement
so provides, a landlord may require a tenant to pay to the landlord a utility
or service charge or a public service charge that has been billed by a utility
or service provider to the landlord for utility or service provided directly, or
for a public service provided indirectly, to the tenant’s dwelling unit or to
a common area available to the tenant as part of the tenancy. A utility or
service charge that shall be assessed to a tenant for a common area must
be described in the written rental agreement separately and distinctly from
such a charge for the tenant’s dwelling unit.”
292 Shepard Investment Group LLC v. Ormandy
“(i) The manner in which the provider assesses a utility or service charge; and
“(ii) The manner in which the charge is allocated
among the tenants if the provider’s bill to the landlord covers multiple tenants.”
The remainder of ORS 90.315(4)(b), subparagraphs
(C) through (E), include additional requirements and guidelines for landlords related to billing tenants for utility or
service charges.2 ORS 90.315(4)(c) describes specific services
for which landlords may charge an additional amount to tenants above the original cost of the service and the procedure
for doing so.3 Those services can include cable television,
direct satellite, other video subscription services, or internet
2
ORS 90.315(4)(b)(C) through (E) provide:
“(C) The landlord must:
“(i) Include in the bill to the tenant a copy of the provider’s bill; or
“(ii) If the provider’s bill is not included, state that the tenant may
inspect the provider’s bill at a reasonable time and place and that the tenant
may obtain a copy of the provider’s bill by making a request to the landlord
during the inspection and upon payment to the landlord for the reasonable
cost of making copies.
“(D) A landlord may require that a bill to the tenant for a utility or service charge is due upon delivery of the bill. A landlord shall treat the tenant’s
payment as timely for purposes of ORS 90.302 (3)(b)(A) if the payment is
made by a date that is specified in the bill and that is not less than 30 days
after delivery of the bill.
“(E) If a written rental agreement so provides, the landlord may deliver
a bill to the tenant as provided in ORS 90.155 or by electronic means.”
3
ORS 90.315(4)(c) provides:
“Except as provided in this paragraph, a utility or service charge may
only include the cost of the utility or service as billed to the landlord by the
provider. A landlord may add an additional amount to a utility or service
charge billed to the tenant if:
“(A) The utility or service charge to which the additional amount is
added is for cable television, direct satellite or other video subscription services or for Internet access or usage;
“(B) The additional amount is not more than 10 percent of the utility or
service charge billed to the tenant;
“(C) The total of the utility or service charge and the additional amount
is less than the typical periodic cost the tenant would incur if the tenant
contracted directly with the provider for the cable television, direct satellite
or other video subscription services or for Internet access or usage;
“(D) The written rental agreement providing for the utility or service
charge describes the additional amount separately and distinctly from the
utility or service charge; and
Cite as 371 Or 285 (2023) 293
access or usage. ORS 90.315(4)(c). ORS 90.315(4)(d) explains
the conditions that landlords must follow when amending
rental agreements to require tenants to pay different utility or service charges than previously provided for in their
rental agreements.4 ORS 90.315(4)(e) explains that utility or
service charges are neither rents nor fees and describes the
proper statutory process for landlords to terminate a rental
agreement for nonpayment of those charges.5
Finally, ORS 90.315(4)(f), the damages provision
that is at issue in this case, provides as follows:
“If 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.”
Procedurally, as this court previously has explained, tenants can seek damages from landlords through an “ ‘implicit
withholding remedy: if the landlord is in noncompliance
with [the landlord’s] obligations under the ORLTA to the
monetary damage of the tenant, the tenant can withhold
rent[;] and if the landlord commences an FED action, the
“(E) Any billing or notice from the landlord regarding the utility or service charge lists the additional amount separately and distinctly from the
utility or service charge.”
4
ORS 90.315(4)(d) provides:
“(A) A landlord must provide 60 days’ written notice to a tenant before
the landlord may amend an existing rental agreement for a month-to-month
tenancy to require a tenant to pay a public service charge that was adopted
by a utility or service provider or a local government within the previous six
months.
“(B) A landlord may not hold a tenant liable for a public service charge
billed to a previous tenant.
“(C) A landlord may not require a tenant to agree to the amendment of
an existing rental agreement, and may not terminate a tenant for refusing
to agree to the amendment of a rental agreement, if the amendment would
obligate the tenant to pay an additional amount for cable television, direct
satellite or other video subscription services or for Internet access or usage as
provided under paragraph (c) of this subsection.”
5
ORS 90.315(4)(e) provides:
“A utility or service charge, including any additional amount added pursuant to paragraph (c) of this subsection, is not rent or a fee. Nonpayment of a
utility or service charge is not grounds for termination of a rental agreement
for nonpayment of rent under ORS 90.394 but is grounds for termination of a
rental agreement for cause under ORS 90.392.”
294 Shepard Investment Group LLC v. Ormandy
tenant can counterclaim’ ” for appropriate damages under
ORS 90.315(4)(f). Eddy v. Anderson, 366 Or 176, 181,
458
P3d 678 (2020) (quoting Napolski v. Champney,
295 Or 408,
418,
667 P2d 1013 (1983)).
Turning now to the damages provision in dispute—
ORS 90.315(4)(f)—as noted, the crux of the parties’ dispute
is whether, when a landlord “fails to comply” with certain
statutory requirements, the tenant’s permitted recovery of
an amount equal to “one month’s periodic rent or twice the
amount wrongfully charged to the tenant” (whichever is
greater), ORS 90.315(4)(f), is intended to apply per a tenant’s
monthly billing cycle. We first observe that the plain statutory text contains no express confirmation of that intended
reading. Damages are awarded when a landlord “fails to
comply.” “Fails to comply,” by its terms, is not limited to
discrete failures; ongoing failures to comply are included.
For example, if a landlord fails to provide a tenant “in the
written rental agreement” an explanation of “the manner in
which the provider assesses a utility or service charge,” as
required under ORS 90.315(4)(b)(B)(i), the harm is a lack of
notice. The harm from that lack of notice does not exist only
once. That harm persists for as long as the rental agreement lacks the required explanation, and the lack of notice
continues.
Relatedly, ORS 90.315(4)(f) provides for damages in
the amount of one month’s periodic rent, or twice the “amount
wrongfully charged.” ORS 90.315 lists a wide variety of
ways in which a pass-through utility charge—the basis for
the parties’ dispute here—can be wrongful. It can be substantively wrongful in amount, by, for example, including
an incorrect or fraudulent amount, or an upcharge beyond
the 10 percent limit provided in ORS 90.315(4)(c)(B). Under
that provision, the harm would be the billing of an excessive or unauthorized amount. But a pass-through utility
charge could also be procedurally wrongful—for example,
an allegation that an undisputed charge had been assessed
without a required disclosure in the rental agreement or
other authorized means of notice. Again, that type of harm
may be ongoing. Failures in the rental agreement have the
potential to render all pass-through utility billing wrongful.
Cite as 371 Or 285 (2023) 295
Because a landlord can fail to comply with paragraphs (a) through (d) of ORS 90.315(4) in ways that are
ongoing, not discrete, and because utilities may be wrongfully charged not just in substance, but procedurally, so as
to affect multiple services in multiple billings over time, the
term “amount wrongfully charged,” as that phrase appears
in ORS 90.315(4)(f), is properly understood as an aggregate
term encompassing both discrete and ongoing violations, see
Webster’s Third New Int’l Dictionary 72 (unabridged ed 2002)
(defining “amount” as, among other things, “the total number or quantity : aggregate”), that is, as determining the
appropriate compensation for the aggregate harm resulting from the landlord’s statutory violation.6 The plain and
natural reading of the text is that damages, for purposes
of ORS 90.315(4)(f), are calculated by totaling the utilities
wrongfully billed over time, doubling that figure (“twice
the amount”), and then comparing it against the tenant’s
monthly periodic rent. Tenant’s proposed interpretation
would require us to insert language that has been omitted,
such as “[Each billing cycle that] a landlord fails to comply with paragraph (a), (b), (c) or (d) of this subsection, the
tenant may recover ….” Or, alternatively, “the tenant may
recover … an amount equal to one month’s periodic rent or
twice the amount wrongfully charged to the tenant [during
a monthly billing cycle], whichever is greater.” In construing
a statute, however, we may not “insert what has been omitted.” ORS 174.010.
Construing “wrongfully charged” as an aggregate term also harmonizes the damages provision in ORS
90.315(4)(f) with its close counterpart provision earlier in
the same statute, set out in subsection (3). Subsection (3)
of ORS 90.315 is the damages provision that applies to violations of subsection (2), which requires a landlord to give
written notice, “at or before the commencement of the tenancy,” of “any utility or service that the tenant pays directly
to a utility or service provider that benefits, directly, the
landlord or other tenants.” As we noted in connection with
6
The dissent draws significance from the use of “amount” rather than
“amounts.” 371 Or at 304 (Nakamoto, J., dissenting). Given our conclusion that
“amount” is an aggregate term, it is not clear why “amount wrongfully charged”
would have a different meaning from “amounts wrongfully charged.”
296 Shepard Investment Group LLC v. Ormandy
ORS 90.315(4), a failure to give such a notice arguably persists throughout the life of the tenancy, until such time as
it is remedied. When a landlord fails to provide the notice
required by subsection (2) of ORS 90.315, the measure of
damages is structurally the same as ORS 90.315(4)(f): “[T]he
tenant may recover twice the actual damages sustained or
one month’s rent, whichever is greater.” ORS 90.315(3).
In Brewer v. Erwin, 287 Or 435, 445,
600 P2d
398 (1979), abrogated on other grounds by McGanty v.
Staudenraus,
321 Or 532,
901 P2d 841 (1995), we construed
the nature of statutory damages in the context of residential
tenancy. In that case, we held that, “when other statutory
indications are lacking, the key to damages seems to be to
determine what kind of harm, in the 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 founded.”
Looking to the harm contemplated, tenant argues
that interpreting the damages provision in subsection (4) of
ORS 90.315 to apply to each discrete time period in which
a violation occurred (in this case, every month) is necessary to prevent landlords from gaining a “windfall” from
ongoing violations. But in so arguing, tenant fails to grapple with the structurally similar damages provision of ORS
90.315(3). Under tenant’s reasoning, an ongoing notice deficiency would apparently be parsed into time periods where
damages might accumulate; each month, each week, each
day—tenant does not say. There is no indication, and tenant
does not argue, that such a result would comply with the
ORLTA’s general requirement that the act “shall be so
administered that an aggrieved party may recover appropriate damages.” ORS 90.125(1) (emphasis added). Tenant
offers no plausible explanation of how, or why, the text of
ORS 90.315(3) would not impose damages per occurrence,
but the text of ORS 90.315(4)(f) would, when the legislature
used structurally similar language within the same statute.
We have explained before that, “in the absence of evidence
to the contrary, we ordinarily assume that the legislature
uses terms in related statutes consistently.” State v. Cloutier,
351 Or 68, 99,
261 P3d 1234 (2011); see also PGE,
317 Or at
611 (noting that “use of the same term throughout a statute
Cite as
371 Or 285 (2023) 297
indicates that the term has the same meaning throughout
the statute”).
Although the legislative history surrounding ORS
90.315(4)(f) is not extensive, it does provide some insight.
Namely, the legislature was primarily interested in ensuring proper notice to tenants, and the presence of a financial
penalty to landlords was simply a mechanism to encourage
such notice, and to encourage landlords to remedy deficiencies once they were discovered. Nothing in the history of
ORS 90.315(4)(f) suggests a legislative intent to impose a
particularly punitive penalty. And nothing indicates that
the legislature envisioned the result that would follow from
tenant’s proposed interpretation, where $480 in utility
pass-through billings, defective only in procedure and not
amount, could result in $9,050 in penalties to the landlord.
Rather, there is some indication that the legislature envisioned the monthly periodic rent as being the upper ceiling
of potential penalties:
“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.”
Testimony, Senate Committee on Business and Consumer
Affairs, HB 3098, May 10, 1999, Ex O (comments of John
Van Landingham (emphasis added)).
In sum, after considering the text, context, and legislative history of ORS 90.315(4)(f), we conclude that damages under that provision are calculated by aggregating
the value of the utilities wrongfully billed, doubling that
figure (“twice the amount”), and then comparing it against
the tenant’s monthly periodic rent. We therefore further
conclude that the trial court erred when it awarded damages to tenant in the amount of 12 months of periodic rent
298 Shepard Investment Group LLC v. Ormandy
totaling $9,050.7 Instead, tenant should have been awarded
the greater of one month’s periodic rent ($740 or $825) or
twice the amount wrongfully charged in the aggregate.8
Here, there is no dispute that twice the amount wrongfully
charged, $960, is the larger of those two sums.9
The decision of the Court of Appeals is affirmed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.
NAKAMOTO, S. J., dissenting.
As tenant established at trial, landlord Shepard
Investment Group LLC repeatedly, and in multiple ways,
7
At argument in this case the parties theorized that a tenant, rather than
asserting a counterclaim in response to an FED action, could affirmatively file a
claim against a noncompliant landlord each month, upon improper utility billing.
In this case we are not called upon to decide, and do not decide, whether such
an affirmative claim is permissible, nor whether ORS 90.315(4)(f) would support
multiple months of rent equivalent penalties when sought in the context of multiple separate actions brought by a tenant.
8
In allowing limited review in this case, we declined to reach the question
of whether the amount of monthly rent at the time of trial should be used when
applying the ORS 90.315(4)(f) formula. In this case, twice the amount wrongfully
charged in the aggregate is greater using either rent amount.
9
The dissent does not seem to engage with the consequences of its position. We understand the dissent to contend that each separate violation of
ORS 90.315(4)(a) through (d) should trigger the penalty clause. 371 Or at 302
(Nakamoto, J., dissenting) (“I conclude that paragraph (f) of ORS 90.315(4) can
reasonably be read to require a penalty for each violation[.]”). The dissent adds
that landlord committed four violations each month. Id. at 300 (Nakamoto, J.,
dissenting) (noting the trial court finding “that landlord violated four different
requirements separately enumerated in ORS 90.315(4) during each of the 12
months at issue between 2018 and 2019”).
If those premises are correct, then the dissent’s argument implies that
the award should have been one month’s rent, times four violations per month,
times 11 months—over $36,000. Yet the dissent instead agrees with the trial
court that $9,050 is the proper measure of damages. Id. at 307 (Nakamoto, J.,
dissenting).
We also note that the dissent’s position implies that the legislature’s direction
to award “twice the amount wrongfully charged the tenant” may never be given
effect. Here, for example, the utility pass-through charges—even doubled—are
only one-tenth the monthly rent, and so under the dissent’s theory there is no
circumstance in which the utility pass-through charges would ever be used to
measure damages.
Moreover, assuming that there may exist rare leases where the utility pass-through charges exceed half the rent, it seems unlikely that the legislature
would be so concerned about that uncommon event that it would enact a special
provision solely to address it—and yet not mention it anywhere in the legislative
history.
Cite as 371 Or 285 (2023) 299
violated requirements in ORS 90.315(4), a subsection of a
statute in the Oregon Residential Landlord and Tenant
Act (ORLTA) that permits landlords to charge tenants for
utilities, but only if landlords properly bill tenants and give
tenants notice and disclosures when choosing that option.
Paragraph (f) of that subsection penalizes a landlord who
fails to meet the requirements associated with charging a
tenant for utilities: “If 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.” Because tenant established that landlord had engaged in multiple violations of
ORS 90.315(4) every month during a 12-month period, the
trial court awarded tenant 12 months of periodic rent. The
majority today reverses the trial court and restrictively
construes paragraph (f)—which says nothing about how it
applies when a landlord violates different statutory requirements repeatedly over time—as plainly offering a limited,
one-time remedy. I dissent.
To read the majority opinion, one might conclude
that landlord made one procedural mistake that it never
rectified before seeking to evict tenant through its forceable
entry and detainer (FED) action. But the trial court’s factual findings establish that landlord violated ORS 90.315(4)
in multiple ways, not merely by committing one violation
that recurred monthly. The trial court found that landlord
had assessed tenant a utility charge of $40 per month for his
use of garbage service, water service, and sewer service at
the apartment complex in which he was a tenant. The court
found that the utility charge had been described as a flat
fee charge for the utility services in both the 2017 and 2019
written rental agreements between the parties. The court
further found that landlord never sent any written or electronic bills to tenant for the utility charge, nor did it offer
him access to, or provide him with copies of, the underlying
bills from the water, sewer, and garbage utility providers.
The trial court found that the bills from the utility providers
for water, sewer, and garbage services at the apartment complex all covered multiple tenants at the complex. However,
the court found, landlord never provided tenant with an
300 Shepard Investment Group LLC v. Ormandy
explanation of the manner in which the providers assessed
charges for the utility in either the written rental agreement or a utility bill to the tenant and did not describe the
manner in which landlord allocated the charges for water,
sewer, and garbage service among the tenants within the
apartment complex.
Based on its findings, the trial court concluded
that landlord had violated four different requirements separately enumerated in ORS 90.315(4) during each of the 12
months at issue between 2018 and 2019.1 Landlord failed to
bill tenant properly for the utility charge, violating two separate billing requirements. First, pursuant to ORS 90.315
(4)(b)(A), “the landlord must bill the tenant in writing for the
utility or service charge within 30 days after receipt of the
provider’s bill,” and, second, pursuant to ORS 90.315(4)(b)(C),
the landlord must include in the bill “a copy of the provider’s bill” or “state that the tenant may inspect the provider’s
bill at a reasonable time and place and that the tenant may
obtain a copy of the provider’s bill by making a request to the
landlord ….”2 In a third violation, landlord failed to provide
tenant, in either a utility bill or the written rental agreement, with a written explanation of the manner in which
the water, sewer, and garbage service providers assessed
charges for utility service. See ORS 90.315(4)(b)(B)(i) (requiring the landlord to provide the tenant, “in the written rental
agreement or in a bill to the tenant,” an explanation of the
“manner in which the provider assesses a utility or service
charge”). And fourth, landlord failed to provide tenant, in
either a utility bill or the written rental agreement, with a
written explanation of the manner in which the charges for
water, sewer, and garbage services were divided among the
tenants, as required by ORS 90.315(4)(b)(B)(ii) (requiring the
landlord to provide an explanation of the “manner in which
the charge is allocated among the tenants if the provider’s
bill to the landlord covers multiple tenants”).
1
The ORLTA has a one-year statute of limitations. See ORS 12.125 (actions
“arising under a rental agreement or ORS chapter 90 shall be commenced within
one year”).
2
Tenant argued to the trial court that landlord had engaged in both billing
violations without specifically citing ORS 90.315(4)(b)(C), and the trial court’s
findings of fact established both of landlord’s billing violations.
Cite as 371 Or 285 (2023) 301
The trial court awarded tenant $9,050 in statutory damages on tenant’s counterclaim for all the statutory
violations landlord committed in each of the 12 months at
issue in the counterclaim. Essentially, the court assessed
the greater of one month’s rent or twice the utility charge
for each month in which landlord violated statutory requirements, awarding the rental amount for 12 months (10
months of rent at $740 per month and two months of rent
at $825 per month). As a result, although tenant owed landlord one month of rent and some utility and other charges,
tenant was the prevailing party in the FED action.
The text of paragraph (f) of ORS 90.315(4) is silent
with respect to how to assess a penalty for multiple and ongoing violations of the requirements in the statute permitting
landlords to charge tenants for utilities. I disagree with the
majority’s conclusion that the text of that paragraph has but
one “plain and natural” meaning: that a landlord is penalized once for multiple violations of ORS 90.315(4) by “totaling the utilities wrongfully billed over time, doubling that
figure, and comparing it against the monthly periodic rent,”
with the greater amount being levied as the penalty. 371
Or at 295. Even if I were to accept the majority’s view that
the same statutory violation recurring on a monthly basis
should be treated as a single violation that gives rise to a
penalty equal to the greater of one month’s rent or double the
utility charges wrongfully assessed during those months, I
would remain skeptical that the legislature intended not to
penalize a landlord for other statutory violations. The onesentence text of ORS 90.315(4)(f) suggests the contrary: A
violation of any statutory requirement gives rise to the penalty (“[i]f a landlord fails to comply with paragraph (a), (b), (c)
or (d) of this subsection,” then “the tenant may recover from
the landlord” the described penalty amount). The majority
opinion does not explain why four separate statutory violations give rise to but one penalty, with the majority’s discussion of context centering on hypothetical violations that
repeat each month and no legislative history indicating that
the legislature viewed the penalty as a one-time occurrence,
no matter how many ways and how many times a landlord disregarded its obligations to its tenant when assessing the tenant for utility charges. To state it bluntly, the
302 Shepard Investment Group LLC v. Ormandy
court’s decision declares without support that the legislature
intended to allow a landlord immunity for disregarding multiple separate duties that attach when it chooses to charge a
tenant for utilities. At the very least, tenant should have a
judgment for an amount equal to four months of rent on his
counterclaim, because tenant suffered from landlord’s four
different violations of statutory requirements.
My skepticism of the majority’s decision further
extends to the conclusions that the majority draws about
the legislature’s intention not to penalize landlords for ongoing violations of the same statutory requirement over time.
I conclude that paragraph (f) of ORS 90.315(4) can reasonably be read to require a penalty for each violation and that
the legislature would have understood that a penalty for
each violation, including when repeated over time, would be
applied when it enacted paragraph (f).
Again, the text is consistent with that reading: If
the landlord fails to comply with the requirements in paragraphs (a), (b), (c), or (d) of ORS 90.315(4), then the penalty
applies. The text does not specify how it is to be applied in a
case like this one, with multiple statutory violations by the
landlord that repeat monthly. However, the fact that the legislature provided that the penalty may be the amount of a
month’s rent—and will be if monthly rent is more than twice
the amount of the wrongful utility charge—suggests that
the legislature could have contemplated a month-by-month
assessment of penalties in view of a tenant’s monthly rent
obligations.
The majority’s admonishment about construing
only the text before us—that to apply a penalty for the violations that landlord committed each month would be to insert
phrases (such as “during a monthly billing cycle”) that have
been “omitted,” 371 Or at 295—applies equally to the majority’s position. The majority inserts qualifiers into paragraph
(f) of ORS 90.315(4) that do not appear in the text in at least
two ways. First, the majority implicitly adds that a landlord’s various methods of noncompliance with the statutory
requirements will be lumped together for purposes of the
remedy: “If the landlord fails to comply with paragraph (a),
(b), (c) or (d) of this subsection, [regardless of noncompliance
Cite as 371 Or 285 (2023) 303
with multiple statutory requirements], 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.” Because the legislature was
trying to ensure that landlords complied with the requirements for assessing utility charges, that reading undercuts
the aim of the penalty.
Second, the majority, concluding that the phrase
“amount wrongfully charged” in paragraph (f) is “an aggregate term,” reads that paragraph with essentially another
addition: “If the landlord fails to comply with paragraph
(a), (b), (c) or (d) of this subsection, [regardless of noncompliance with multiple statutory requirements], 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 [in each month, added together for all months in the
time period covered by the claim], whichever is greater.” But
that is not the only way that the text may be understood.
Paragraph (f) says that the penalty may be twice “the amount
wrongfully charged,” not “amounts wrongfully charged”
over time. The determination of the penalty depends on a
comparison of two amounts, “one month’s periodic rent” and
“the amount wrongfully charged,” and, because the amount
charged for utilities will be on a monthly basis, considering how utilities charge for services, it is reasonable to
think that the legislature intended the comparison of “the
amount” of the wrongful utility charge and the rent amount
to occur monthly.
The majority explains that context, specifically, the
penalty provision in subsection (3) of ORS 90.315, bolsters
its view of paragraph (f). Subsection (2) requires a landlord
to “disclose to the tenant in writing at or before the commencement of the tenancy any utility or service that the
tenant pays directly to a utility or service provider that benefits, directly, the landlord or other tenants.” The penalty
for a landlord who “knowingly” fails to comply then is set
out in subsection (3): “[T]he tenant may recover twice the
actual damages sustained or one month’s rent, whichever
is greater.” The majority suggests that, because a knowing
failure to include a written disclosure at the commencement
304 Shepard Investment Group LLC v. Ormandy
of the tenancy as required by subsection (2) “arguably persists throughout the life of the tenancy, until such time
as it is remedied,” 371 Or at 295-96, the legislature must
have understood that the penalty amount would be either
one month’s rent, even if the violation persisted over the
time period covered by the claim, or else twice the amount
of “damages sustained” over the time period covered by
the claim, whichever is greater, see id. at 296. Notably, the
majority views the penalty in paragraph (f) and the penalty
in subsection (3) as containing “structurally the same” penalty. Id.
In two ways, that contextual analysis by the majority is unpersuasive. The majority assumes that the penalty
in subsection (3) is either one month’s rent or two times damages sustained over time. But that issue is not before the
court, and the issue has not been previously addressed by
the court, so one premise of the majority’s analysis is merely
an assumption. It is possible, assuming a continuing violation of the requirement in ORS 90.315(2) to provide a written disclosure at the outset of a tenancy, that the comparison in the penalty provided by subsection (3) is on a monthly
basis: one month’s rent or twice the damages—presumably,
the amount that the tenant had paid for utilities that the
landlord knew had benefited the landlord rather than the
tenant—sustained in the month in which the violation
continues.
But even if the majority correctly views the operation of subsection (3) of ORS 90.315 as a one-time comparison
of one month’s rent with twice the sum of damages sustained
over the period covered by the claim, the text and context of
the penalty provisions in subsection (3) and paragraph (f)
of subsection (4) meaningfully differ. The penalty in subsection (3) compares the monthly rent amount with “twice
the actual damages sustained” when a landlord charges the
tenant for utilities that are delivered to areas other than the
tenant’s dwelling unit, such as common areas in an apartment complex, and knowingly fails to disclose that information in writing “at or before the commencement of the
tenancy.” ORS 90.315(2). The phrase “damages sustained”
suggests a total summed amount for the claim, whereas the
counterpart in paragraph (f) of subsection (4), “the amount
Cite as 371 Or 285 (2023) 305
wrongfully charged to the tenant,” suggests a singular
amount, such as an overcharge billed to the tenant in a particular month. The context for the penalty in paragraph (f)—
the variety of requirements that a landlord must meet, not
all of which necessarily will involve the assessment of a utility charge, e.g., ORS 90.315(4)(d)(C) (prohibiting termination
of a rental agreement in certain circumstances)—further
suggests that the legislature viewed the penalty as focused
on each violation of a statutory requirement, rather than
focusing on a cumulative sum of utility charges as compared
to one month’s rent.
An implicit premise underlying the majority opinion is that “the amount wrongfully charged” means the sum
of utility charges assessed in any month during which the
landlord violated at least one statutory requirement in ORS
90.315(4)(a) through (d). The legislative history of the 1999
amendments to ORS 90.315(4), which added the penalty provision now codified in paragraph (f), suggests that “wrongful
charges” refers instead to charges for utilities that exceed
the charges allowed by statute and not to the amount of the
utilities assessed during months in which the landlord committed a violation of any statutory requirement, even if the
landlord was otherwise entitled to pass on the utility cost
to the tenant. If that legislative history correctly reflects
the legislature’s intention, the history serves as further evidence that the majority’s view of how the penalty works in
paragraph (f) is wrong.
In 1997, the legislature first addressed, and permitted landlords to assess tenants, actual costs for utility services without treating the charges as rent. Or Laws 1997,
ch 577, § 16. The pass-through utility charge provisions
were and remain codified in ORS 90.315(4). The law did not
contain a penalty provision if the landlord violated any of
the requirements associated with passing on utility charges
to tenants.3
3
The 1997 legislation included the following requirements: (1) the charge
must be authorized in the written rental agreement; (2) pass-through charges
for common areas must be set out separately; (3) the landlord could add no additional costs, such as administrative fees; and (4) unless the rental agreement
spelled out the method of allocating utility charges to the tenant, the tenant had
the right to a copy of the utility provider’s bill as a condition to payment of the
charges. Or Laws 1997, ch 577, § 16.
306 Shepard Investment Group LLC v. Ormandy
In 1999, the legislature amended ORS 90.315. Or
Laws 1999, ch 603, § 18. The law largely amended paragraph (a) of subsection (4) and added paragraphs (b) through
(d) to subsection (4) to address video and internet utility services. Id. Through the amendments, landlords could charge
tenants for video and internet services as utilities, including
an ability for landlords to add “an additional amount,” up to
a 10 percent profit, so long as the markup was disclosed on
the tenant’s bill and the total charge to a tenant was below
the market price that the tenant would have to pay the provider for the same service individually. Id. All other utility services could not be marked up. The term “additional
amount” was repeated throughout the amendments to subsection (4). Id.
Significantly, the amendment included a new penalty provision in paragraph (e) of subsection (4) of ORS
90.315, for violations of paragraphs (a) through (d), that is in
substance the same one now found in paragraph (f). Id. The
tenant could recover a penalty of one month’s periodic rent
or twice the amount wrongfully charged to the tenant.
In view of the added requirements for landlords as
of 1999 in subsection (4) of ORS 90.315 pertaining to the
restrictions on the amount of charges that landlords could
assess, the legislature’s addition of a penalty that could be
the amount of one month’s rent or twice the amount wrongfully charged suggests that part of the penalty determination depended on the amount of an overcharge for utilities.
As for whether the 1999 legislature viewed the penalty as
applying in any given month when the landlord violated the
charging requirements, a witness testified that the penalty
for landlord noncompliance with the requirements “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.” Testimony, Senate
Committee on Business and Consumer Affairs, HB 3098,
May 10, 1999, Ex O (comments of John Van Landingham).
That testimony is far from definitive, but it is consistent
with the view that the legislation was directed at monthly
billing and penalizing landlords with as much as a month’s
rental amount if they violated the requirements in any given
month.
Cite as 371 Or 285 (2023) 307
The procedural requirements added to ORS
90.315(4)(b) that landlord violated in this case were not
added until 2015. See Or Laws 2015, ch 388, § 8. Thus, those
amendments should not be considered in assessing what
the 1999 legislature intended when it enacted the penalty
now codified in paragraph (f). Substantively, the 2015 legislature retained the same penalty provision now codified in
paragraph (f), and the parties have presented no legislative
history indicating that the legislature intended to treat violations of the procedural requirements any differently than
the requirements limiting the amount of the utility charges
a landlord assessed to the tenant.
Finally, I disagree with the majority’s suggestion,
while citing ORS 90.125(1) (providing that the ORLTA “shall
be so administered that an aggrieved party may recover
appropriate damages”), that the penalty awarded by the
trial court was inappropriate. 371 Or at 296. Although the
majority contends that tenant offered no plausible explanation for why a four-figure damage amount is appropriate, id.,
tenant explained in his brief, citing Brewer v. Erwin, 287 Or
435, 442,
600 P2d 398 (1979), that remedial statutory penalties in the ORLTA are designed to ensure landlord compliance with statutory obligations and to “make it unprofitable
to engage in an improper practice when a defendant might
otherwise be prepared to bear the risk of having to pay for
the resulting harm as an acceptable business cost.” In holding that punitive damages were unavailable for violations
of the ORLTA, we explained in Brewer that the ORLTA
included statutory damages that are often noncompensatory
and that the legislature’s uses of those types of statutory
damages accomplish the same deterrent effect as punitive
damages.
Id. at 443. In my view, the penalty amount in this
case serves as a deterrent for landlords, who can disregard
the requirements for charging for utilities and who can replicate those violations with many different tenants. It was
and is an appropriate amount and constitutes an exercise
of the legislature’s judgment about the appropriate penalty
that would ensure a landlord’s compliance with all of the
statutory requirements concerning utility charges in the
ORLTA. I respectfully dissent.
