Hickey v. Scott ( 2021 )

825
Submitted January 6, affirmed April 21, 2021
Xin HICKEY,
Plaintiff-Respondent,
v.
Joshua SCOTT,
Jamie Katherine Scott,
and all other occupants,
Defendants-Appellants.
Lincoln County Circuit Court
19LT18673; A173328
492 P3d 123
In this action for residential forcible entry and detainer (FED), plaintiff
landlord successfully sought to evict defendant tenants for nonpayment of rent.
Defendants appeal, assigning error to the trial court’s denial of their motion to
dismiss. Defendants moved to dismiss on the basis that plaintiff’s written notice
of intent to terminate for nonpayment of rent was invalid, due to failing to “spec-
ify the amount of rent that must be paid * * * to cure the nonpayment of rent,”
as required by ORS 90.394(3). Specifically, defendants argued that the notice
was invalid because they actually owed less than the amount specified in the
notice. The notice specified that the amount owed was $1,700, whereas defen-
dants contended that they owed either nothing or less than $1,700, and the trial
court ultimately found that they owed $1,175. Held: The trial court did not err
in denying defendants’ motion to dismiss. Under ORS 90.394(3), a notice must
specify the amount of rent that the landlord is demanding to cure the rent default
and avoid an eviction action. If the landlord is incorrect about the amount of rent
due, the landlord may lose on the merits in an FED action (if the tenant has paid
the amount actually due), but that does not render the underlying notice invalid.
Affirmed.
Philip L. Nelson, Senior Judge.
Blair Bobier, Emily Rena-Dozier, and Legal Aid Services
of Oregon filed the brief for appellants.
No appearance for respondent.
Before Armstrong, Presiding Judge, and Tookey, Judge,
and Aoyagi, Judge.
AOYAGI, J.
Affirmed.
826 Hickey v. Scott
AOYAGI, J.
In this action for forcible entry and detainer (FED),
plaintiff landlord successfully sought to evict defendant ten-
ants from a rental unit for nonpayment of rent. Defendants
appeal, assigning error to the trial court’s denial of their
motion to dismiss. Defendants argue that plaintiff’s writ-
ten notice of termination for nonpayment of rent was invalid
because it did not “specify the amount of rent that must be
paid * * * to cure the nonpayment of rent,” as required by
ORS 90.394(3).1 More specifically, defendants argue that the
notice was invalid because it specified the amount of rent
that had to be paid as $1,700, when, in fact, the FED court
later found that the amount actually due was $1,175. In
defendants’ view, they were entitled to dismissal of the FED
action, based on invalid notice, once the court determined
that they owed a lesser amount of rent than the landlord
claimed. We conclude that the trial court did not err in deny-
ing defendants’ motion to dismiss and, accordingly, affirm.
FACTS
“Generally, we review rulings in residential FED
actions for errors of law.” Gibson v. Walsh, 308 Or App 119,
120, 480 P3d 990 (2020). We state the facts as the trial court
found them, noting that, in this case, none of the findings
are challenged. Id.Defendants rented an apartment from plaintiff
beginning in October 2019. It was a month-to-month ten-
ancy. Under the rental agreement, defendants were to pay
a $1,500 security deposit and $850 monthly rent. When
they moved in, defendants paid $525 toward their October
rent. In late October, the Siletz Tribal Housing Department
(STHD) paid plaintiff $1,500 as a security deposit on defen-
dants’ behalf. No further payments were made.
On December 17, 2019, plaintiff mailed a notice of
nonpayment of rent to defendants. The notice stated that
1
In connection with the COVID-19 pandemic, ORS 90.394 was temporarily
amended to require longer notice periods. See Or Laws 2020, ch 3, § 10 (3rd Spec
Sess). The length of the notice period is immaterial to the issue on appeal, so we
cite the current statute, rather than the earlier version under which plaintiff’s
FED complaint was decided.
Cite as 310 Or App 825 (2021) 827
defendants owed $1,700 in unpaid rent—$850 for October,
and $850 for November—and that the rental agreement
would terminate unless the unpaid rent was paid by
December 27, 2019, at 11:59 p.m. Defendants paid noth-
ing, and plaintiff initiated an FED action on December 30,
2019.
The FED trial was held on January 27, 2020. In
opening statement, defendants said they would move to dis-
miss on the basis that they owed no rent for October and
November, because they had paid $525 personally and STHD
had paid $1,500 on their behalf, which was more than the
$1,700 rent for those two months. The court then heard the
evidence, which raised several fact disputes. Defendants put
on evidence that they paid $525 rent in early October and
that STHD paid $1,500 rent on their behalf in late October.
Plaintiff put on evidence that defendants paid $425 rent in
October (half of the October rent), that defendants paid a
$100 cleaning deposit at the same time, and that STHD paid
$1,500 for defendants’ security deposit. At the close of evi-
dence, defendants renewed their motion to dismiss, arguing
that they owed no rent for October and November. In the
alternative, they argued that, in any event, they owed less
than $1,700, entitling them to dismissal based on invalid
notice, because the notice did not state the true amount
owed.
The trial court took the matter under advisement
and then issued a letter opinion later the same day, in which
it denied defendants’ motion to dismiss and ruled in plain-
tiff’s favor on the FED complaint. Factually, the court found
that defendants had paid $525 toward October rent, which
plaintiff failed to credit, and that STHD had paid $1,500
for defendants’ security deposit. Thus, the court found
that plaintiffs owed $1,175 in overdue rent for October and
November. Legally, the court denied defendants’ motion to
dismiss, rejecting their argument that plaintiff’s termina-
tion notice was “invalid” because it stated that $1,700 was
due. The court explained its understanding of the statute
as being that, if rent was overdue and there was a dispute
about the amount, the tenant could pay the actual amount
due and successfully defend against eviction, but the tenant
828 Hickey v. Scott
could not pay nothing and avoid eviction based on a dis-
crepancy between how much the landlord claimed was due
and how much was actually due. Because defendants owed
$1,175 in back rent when plaintiff gave notice of termina-
tion, and they paid nothing, the court entered judgment for
plaintiff.
Defendants appeal, assigning error to the denial of
their motion to dismiss.
ANALYSIS
The issue on appeal turns on the correct construc-
tion of ORS 90.394(3), a provision of the Oregon Residential
Landlord and Tenant Act (ORLTA). As with all questions
of statutory construction, we seek to ascertain the intent
of the legislature by examining the text and context of the
disputed statutory provision, as well as any helpful legis-
lative history. State v. Gaines, 346 Or 160, 171-73, 206 P3d
1042 (2009). Unless there is reason to believe otherwise,
we presume that words of common usage were meant to
have their plain and ordinary meaning. PGE v. Bureau
of Labor and Industries, 317 Or 606, 611, 859 P2d 1143(1993).
Subject to exceptions not applicable here, the ORLTA
“applies to, regulates and determines rights, obligations and
remedies under a rental agreement, wherever made, for a
dwelling unit located within this state.” ORS 90.115. ORS
90.394 permits a landlord to terminate a rental agreement
for nonpayment of rent and take possession of the prem-
ises as provided in ORS 105.105 to 105.168. The landlord
must first deliver a written notice of nonpayment of rent and
intention to terminate, with the required amount of notice
depending on the nature of the tenancy and the day of the
rental period when the notice is sent. See ORS 90.394(1) - (2).
The notice must state that the landlord intends to termi-
nate the rental agreement unless the rent is paid within the
notice period. Id. The notice “must also specify the amount
of rent that must be paid and the date and time by which the
tenant must pay the rent to cure the nonpayment of rent.”
ORS 90.394(3).
Cite as 310 Or App 825 (2021) 829
The latter requirement to specify the amount of rent
and deadline to cure was added in 2005 as part of a group
of ORLTA amendments. A representative of the landlord-
tenant coalition that negotiated, drafted, and proposed the
2005 amendments to the legislature testified that the lan-
guage now codified in ORS 90.394 would require the land-
lord to “describe a cure” by stating the “specific amount of
money” that needed to be paid to cure the tenant’s violation
of the rental agreement by nonpayment of rent:
“Nonpayment of rent notices are * * * quite similar to
30-day-for-cause termination notices under existing ORS
90.400(1) (and now section 7 of this bill), in that the basis of
the termination is a violation by the tenant (failure to pay
the rent) which the tenant can cure (by paying the rent)
within a certain time after delivery of the notice. Just as
we now require 30-day-for-cause notices to describe a cure,
we here require nonpayment of rent notices to describe the
cure—payment of a specific amount of money. Some trial
courts have already begun to read ORS 90.400(2) to impose
this requirement. We now make it explicit.”
Testimony, Senate Committee on Rules, HB 2524A, June 1,
2005, Ex H at 8 (statement of John VanLandingham)
(“VanLandingham Testimony”); see also id. at 4 (explaining
that HB 2524A would break up then-existing ORS 90.400
into separate sections).
Under the ORLTA, if a landlord gives notice of ter-
mination for nonpayment of rent, and the tenant does not
timely cure the default, the landlord may file an FED action
to evict the tenant and retake possession of the premises.
See ORS 90.394 (permitting the landlord to “terminate the
rental agreement for nonpayment of rent and take possession
as provided in ORS 105.105 to 105.168”); ORS 105.115(2)(b)
(providing that the landlord may file an FED action to evict
the tenant “after the expiration of the time period provided
in a notice terminating the tenancy”); C.O. Homes, LLC v.
Cleveland, 366 Or 207, 211, 460 P3d 494 (2020) (“The FED
statutes provide the process by which a landlord may recover
possession of a residential dwelling unit after the landlord
has terminated a rental agreement.”). For FED purposes, it
is a cause of “unlawful holding by force” when a tenant “fails
830 Hickey v. Scott
or refuses to pay rent within the time period required by a
notice under ORS 90.394.” ORS 105.115(2)(a)(A).2
Once an FED action is filed, ORS chapter 90 applies
to determine the rights of the parties, “including: (a) [w]het-
her and in what amount rent is due; (b) [w]hether a ten-
ancy or rental agreement has been validly terminated; and
(c) [w]hether the tenant is entitled to remedies for retalia-
tory conduct by the landlord as provided by ORS 90.385
and 90.765.” ORS 105.115(3). The tenant may bring coun-
terclaims against the landlord. ORS 90.370. The prevailing
party may be awarded attorney fees. ORS 90.255.
In that larger statutory context, we consider what
the legislature meant when it added the requirement that a
notice of termination for nonpayment of rent “also specify the
amount of rent that must be paid and the date and time by
which the tenant must pay the rent to cure the nonpayment
of rent.” ORS 90.394(3). Specifically, we consider whether
that provision requires the landlord to state the amount of
rent that the landlord claims is owed or, conversely, whether
it requires the landlord to state the amount of rent that is
actually owed (as found by a neutral factfinder if necessary).
The trial court applied the former construction, whereas
defendants argue for the latter construction. Plaintiff has
not appeared on appeal, but that does not affect our obli-
gation to construe the statute correctly. See Yarbrough v.
Viewcrest Investments, LLC, 299 Or App 143, 152 n 5, 449
P3d 902 (2019), rev den, 366 Or 135 (2020) (“[I]n construing
a statute, this court is responsible for identifying the correct
interpretation, whether or not asserted by the parties.”).
In support of their position, defendants analogize to
Greenway v. Parlanti, 245 Or App 144, 261 P3d 69 (2011), in
which we construed ORS 90.396. If a tenant commits cer-
tain acts or omissions, ORS 90.396(1) allows the landlord
2
It is also unlawful holding by force “[w]hen a rental agreement by its terms
has expired and has not been renewed, or when the tenant or person in posses-
sion remains in possession after a valid notice terminating the tenancy pursuant
to ORS chapter 90, or is holding contrary to any valid condition or covenant of
the rental agreement or ORS chapter 90.” ORS 105.115(2)(a)(B). Whereas ORS
105.115(2)(a)(A) applies specifically to termination for nonpayment of rent under
ORS 90.394, ORS 105.115(2)(a)(B) applies more broadly to the many other rea-
sons that a rental agreement may terminate.
Cite as 310 Or App 825 (2021) 831
to terminate the rental agreement and file an FED action,
but it requires “at least 24 hours written notice specifying
the acts and omissions constituting the cause and specify-
ing the date and time of the termination.” In Greenway, we
held that a notice that stated that the defendant’s tenancy
would terminate “twenty four (24) hours from the time of
service” did not comply with ORS 90.396. 245 Or App at 148.
For two reasons, we agreed with the defendant that a notice
under ORS 90.396 must state a “specific date and time” for
termination. Id. First, looking to the dictionary definition of
“specifying”—which is “ ‘to mention or name in a specific or
explicit manner: tell or state precisely or in detail’ ”—we con-
cluded that the legislature intended the landlord to specify
an actual date and time, such as “12:00 p.m. on October 6,
2009.” Id. at 148-49 (quoting Webster’s Third New Int’l
Dictionary 2187 (unabridged ed 2002)). Second, because the
ORLTA permits service in various ways, service-dependent
language like that in the plaintiff’s notice would leave ten-
ants to guess when a tenancy would terminate. Id. at 149.
Here, unlike the situation in Greenway, there is
no question that plaintiff’s termination notice specified
an actual amount of rent. See ORS 90.394(3) (requiring
notice to “specify the amount of rent that must be paid”).
The notice did not say, for example, that the tenancy would
terminate unless defendants paid “the amount due” or paid
“the rent that had not been paid.” The issue here is therefore
different from that in Greenway. The question is not whether
the notice “specified” an amount of rent, but rather what
“amount of rent” means in this context. Is it the amount
that the landlord claims is owed? Or is it the amount that is
actually owed, as a matter of fact, even if determining that
fact requires judicial factfinding?
Consistent with the trial court’s ruling, we conclude
that the “amount of rent” that must be specified in a ter-
mination notice under ORS 90.394(3) is the specific dollar
amount that the landlord claims must be paid to cure the
default, not the amount actually due as found by a fact-
finder. Several considerations lead us to that conclusion.
First, ORS 90.394 contemplates the landlord draft-
ing the notice. As such, the more natural reading of the
832 Hickey v. Scott
statutory text in context is that the notice must specify the
dollar amount that the landlord claims must be paid, by the
designated date and time, to cure the default and avoid termi-
nation. To the extent that there may be disagreement about
the amount due (known or unknown to the landlord), the
landlord can only be expected to state the amount that the
landlord believes is due. The landlord has no greater author-
ity than the tenant to determine what is actually due—that
is a question for the court in the end. As long as the notice
states the specific “amount of rent” claimed to be due and
the specific “date and time” set for termination, the notice
complies with ORS 90.394(3), even if the tenant may later
contest that rent is owed, contest how much rent is owed, or
otherwise challenge the validity of the purported termina-
tion. If the landlord files an FED action and fails to prove
that the tenant actually owes rent, the tenant will prevail on
the merits, but it does not follow that the notice was invalid.
Second, ORS 105.115 specifically provides for an
FED court to determine “[w]hether and in what amount
rent is due.” ORS 105.115(3). Thus, when ORS 90.394(3)
was added to the ORLTA in 2005, the legislature would
have understood that, if a tenant disagreed with the dol-
lar amount stated in the termination notice, the FED court
would be able to resolve that dispute and would evict the
tenant only if the tenant was actually in arrears on rent and
had failed to cure the actual deficiency upon receiving notice
of termination for nonpayment of rent.
Third, both the legislative history of ORS 90.394(3)
and our construction of the related statute ORS 90.396
in Greenway support our understanding that the purpose
of ORS 90.394(3) is to ensure that a termination notice is
unambiguous about the landlord’s intentions—to terminate
the rental agreement for nonpayment of rent if X amount is
not paid by Y date—not to conclusively establish the parties’
rights. Requiring the notice to specify the exact termina-
tion date and time eliminates guesswork about when the
landlord intends that termination will occur, see Greenway,
245 Or App at 149, but the tenant may still challenge the
validity of the termination and, if successful, avoid eviction,
see ORS 105.115(3)(b) (allowing an FED court to determine
“[w]hether a tenancy or rental agreement has been validly
Cite as 310 Or App 825 (2021) 833
terminated”). Similarly, requiring the notice to specify the
exact amount that must be paid to avoid termination elim-
inates guesswork about the amount being demanded, see
VanLandingham Testimony at 8, but the tenant may still
dispute any portion of that amount, including contesting the
validity of a termination based on failure to pay the dis-
puted portion, see ORS 105.115(3)(a) - (b).
Indeed, the landlord-tenant coalition representative
who testified about the 2005 amendments to the ORLTA
commented to very similar effect. One amendment imposed
a requirement that a 30-day for-cause termination notice
describe “at least one possible remedy to cure the viola-
tion and designate the date by which the tenant must cure
the violation,” if the violation was curable. Or Laws 2005,
ch 391, § 7; see ORS 90.392(3)(c) (codifying same). Regarding
that amendment, the representative said:
“The 30 day termination notice must now describe at least
one possible cure—not the only cure, mind you; the judge
will ultimately decide what is a cure—and specify the cure
date, for example: ‘To avoid this termination, you must pay
the late charge [a cure] by June 15 [the cure date], or your
tenancy will terminate on July 1.’ ”
VanLandingham Testimony at 6 (emphasis added). When the
representative later addressed the amendment now codified
as ORS 90.394(3), he described nonpayment-of-rent notices
as “quite similar” to 30-day for-cause notices and indicated
that both amendments served the same purpose—to require
the landlord to describe a cure. Id. at 8. The legislative his-
tory is consistent with our view of ORS 90.394(3) as requir-
ing a notice that clearly states the landlord’s position, rather
than one that perfectly predicts a final determination of the
parties’ rights.3
3
Defendants argue in their briefing that the trial court’s construction of ORS
90.394(3) requires tenants “to ‘guess’ how much rent they actually owe.” They
argue that that is analogous to requiring tenants “to guess as to when the tenancy
terminates.” Greenway, 245 Or App at 149. But the analogy does not hold up. When
terminating a rental agreement for nonpayment of rent, the landlord unilaterally
sets the date and time of termination, so ORS 90.394(3) is necessarily referring to
the date and time chosen by the landlord. By contrast, the amount of rent neces-
sary to cure default is an independent fact, about which people may disagree, but
which only a court can conclusively decide. The “amount of rent” in ORS 90.394(3)
therefore could have different meanings—what the landlord believes is necessary
to cure, what the tenant believes is necessary to cure, or what is actually necessary
834 Hickey v. Scott
Fourth, defendants’ proposed construction of ORS
90.394(3) contemplates a scenario in which a landlord gives
a tenant notice of termination for nonpayment of rent and
files an FED action, the court holds the FED trial and finds
the relevant facts, and the tenant then challenges the valid-
ity of the notice based on the ultimate facts found by the
court. At that point, in defendants’ view, if the tenant owes
a dollar less rent than the landlord claimed, the action must
be dismissed, the landlord must serve a new notice and file
a new FED action, and a second FED trial must be held.
It is difficult to believe that the legislature intended notice
validity to be determined by a full FED trial (or intended to
require multiple FED trials to resolve one FED claim).
For all of those reasons, we conclude that, to com-
ply with ORS 90.394(3), a notice of termination for nonpay-
ment of rent must specify the dollar amount that the land-
lord claims is necessary to cure. If the tenant pays a lesser
amount and contests the difference, it is for the FED court
to determine whether any nonpayment of rent has occurred.
The tenant will not be subject to eviction if the tenant cured
the actual deficiency (or, possibly, if the tenant deposited
the disputed amount with the court4). But, upon receiving a
notice of termination for nonpayment of rent, a tenant who is
in fact behind on rent cannot pay nothing, continue to occupy
the premises, litigate the amount owed, and then obtain
dismissal of the FED action on the basis that the amount
stated in the notice was not exactly the same as the amount
ultimately found by the court to be owed. In rejecting that
approach, the trial court correctly construed ORS 90.394(3),
and it did not err by denying defendants’ motion to dismiss.
Affirmed.
to cure—but, for the reasons discussed, we conclude that the legislature intended
the notice to state the landlord’s position. A tenant who wants to avoid eviction
may try to “guess” whose version of the facts an FED court will find credible—in
deciding whether to pay the entire noticed amount or risk taking the matter to
court—but that is very different from the “guessing” in Greenway.
4
Cf. Napolski v. Champney, 295 Or 408, 420, 667 P2d 1013 (1983) (“[B]ecause
defendant here had asserted a valid counterclaim against plaintiff under the
ORLTA and had tendered into court sufficient funds to cover the rent that was
ultimately adjudged due plaintiff, under ORS 91.810(1) she was entitled to retain
possession of the premises. Moreover, since she prevailed on both her counter-
claim and on the issue of possession, she was also entitled to recover costs and
disbursements, and attorney fees.”).