C.O. Homes, LLC v. Cleveland

                                      207

Argued and submitted November 1, 2019; decision of Court of Appeals reversed,
   judgment of circuit court reversed, and case remanded to circuit court for
                      further proceedings March 5, 2020


                    C.O. HOMES, LLC,
                   Respondent on Review,
                              v.
                   Nancy CLEVELAND,
                       and occupants,
                    Petitioner on Review.
          (CC 17LT06237) (CA A165208) (SC S066504)
                                  

     Plaintiff, C.O. Homes, LLC, brought a forcible entry and detainer (FED)
action to recover possession of a residential dwelling unit subject to the Oregon
Residential Landlord and Tenant Act (ORLTA), that was occupied by defen-
dant, Nancy Cleveland. In its original FED complaint, plaintiff attached a
72-hour notice, which purported to terminate the parties’ rental agreement
due to tenant’s failure to pay her security deposit. Under the ORLTA, a 72-hour
notice of termination may be given for the nonpayment of rent. Two days before
trial, plaintiff moved to amend its complaint to attach an additional notice of
termination—a 30-day notice, which under the ORLTA, may be given “for cause.”
Like the 72-hour notice, the 30-day notice also purported to terminate the par-
ties’ rental agreement due to tenant’s failure to pay her security deposit. On
the morning of trial, and over tenant’s objection that the proposed amendment
added a new basis for landlord’s FED claim and prejudiced tenant, the trial court
allowed the amendment. Tenant appealed, and the Court of Appeals affirmed.
Held: The trial court abused its discretion under ORCP 23 A when it allowed
landlord to amend its complaint because the proposed amendment substantially
changed landlord’s claim for relief and would unduly prejudice tenant.
    The decision of the Court of Appeals is reversed. The judgment of the cir-
cuit court is reversed, and the case is remanded to the circuit court for further
proceedings.



    En Banc
    On review from the Court of Appeals.*
   Geoffrey B. Silverman, The Law Office of Geoffrey B.
Silverman, Portland, argued the cause and filed the briefs
on behalf of petitioner on review.

______________
   * On appeal from Deschutes County Circuit Court, Walter Miller, Judge. 

, 

 (2019).
208                          C.O. Homes, LLC v. Cleveland

   Helen C. Tompkins, Tompkins Law Office, LLC, Bend,
argued the cause and filed the brief on behalf of respondent
on review.
  WALTERS, C. J.
   The decision of the Court of Appeals is reversed. The
judgment of the circuit court is reversed, and the case is
remanded to the circuit court for further proceedings.
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 (2020)                                                 209

           WALTERS, C. J.
         In this forcible entry and detainer (FED) action to
recover possession of a residential dwelling unit, we con-
sider whether the trial court erred in allowing landlord’s
motion to amend its complaint, pursuant to ORCP 23, after
the parties attended a first-appearance hearing and tenant
filed her answer. In its original complaint, landlord alleged
that it was entitled to possession based on a 72-hour notice—
which, under ORS 90.394, may be given for nonpayment of
rent—and attached that notice to its complaint. Two days
before trial, landlord sought leave to amend its complaint
to attach a different notice—a 30-day notice—which, under
ORS 90.392, may be given “for cause,” including a material
violation of the rental agreement. For the reasons that fol-
low, we conclude that the proposed amendment substantially
changed landlord’s claim for relief and prejudiced tenant,
and that the trial court abused its discretion in allowing
it. We reverse both the contrary decision of the Court of
Appeals and the trial court judgment.
                            BACKGROUND
        Landlord, C.O. Homes, LLC, and tenant, Nancy
Cleveland, entered into a rental agreement for a “dwelling
unit,” and the tenancy that resulted is governed by ORS
chapter 90, the Oregon Residential Landlord and Tenant
Act (ORLTA). ORS 90.115.1 The parties’ rental agreement
provided that, in exchange for possession of the property,
tenant would pay monthly rent and make monthly payments
toward a security deposit. When tenant failed to make the
security-deposit payments, landlord gave tenant a 30-day
“for cause” notice of termination under ORS 90.392. About
a month later, landlord gave tenant a different notice of
termination—a 72-hour notice, which is permissible under
ORS 90.394 if a tenant has failed to pay rent. Both notices
stated that tenant had failed to make the security-deposit
payments, but each stated that tenant owed a different

    1
      The ORLTA, with some exceptions which are set out in ORS 90.110 and
ORS 90.113, “applies to, regulates and determines rights, obligations and reme-
dies under a rental agreement, wherever made, for a dwelling unit located within
[Oregon].” ORS 90.115.
210                                     C.O. Homes, LLC v. Cleveland

amount, and each designated a different date by which
tenant had to cure the violation.2
            Under ORS 90.392(1), a landlord may provide a
30-day notice terminating a rental agreement “for cause”
and take possession of the premises as provided in the FED
statutes, ORS 105.105 to 105.168. Causes for termination
under ORS 90.392 include a tenant’s “material violation”
of the rental agreement, a tenant’s “material violation” of
ORS 90.325, or a tenant’s failure to pay rent. ORS 90.392
(2)(a) - (c). Under ORS 90.392, a “for cause” notice must
(1) specify the “acts and omissions constituting the viola-
tion”; (2) state that “the rental agreement will terminate
upon a designated date not less than 30 days after delivery
of the notice”; and (3) if the tenant can cure the violation,
“state that the violation can be cured, describe at least one
possible remedy to cure the violation and designate the date
by which the tenant must cure the violation.” ORS 90.392
(3)(a) - (c).3 If the tenant cures the violation by the designated
date, then the tenancy does not terminate; but if the tenant
does not timely cure, then “the rental agreement terminates
as provided in the notice.” ORS 90.392(4)(b).
         Under ORS 90.394, a landlord may terminate a
residential rental agreement for nonpayment of rent on a
shorter timeline: ORS 90.394 permits a landlord to termi-
nate such a rental agreement for nonpayment of rent by giv-
ing a tenant at least 72 hours’ written notice of termination.4
The notice must state the amount of rent due and inform the
tenant of the deadline by which the tenant must pay that
rent to cure the violation. ORS 90.394(3). As with a 30-day
notice of termination under ORS 90.392, if the tenant does
not cure by the designated date, the rental agreement ter-
minates, and the landlord may take possession of the prem-
ises as provided in the FED statutes. ORS 90.394.
    2
      The 30-day notice informed tenant that she owed $900 toward her deposit
and that, to cure that violation, she must pay that amount by April 7, 2017. The
72-hour notice informed tenant that she owed $1,200 toward her deposit that she
must pay that amount by April 27, 2017 at 11:59 PM.
    3
      The designated date for cure must meet the requirements of ORS 90.392(4)(a).
    4
      ORS 90.394 provides that, depending on the circumstances, a landlord may
provide either a 72-hour or a 144-hour notice of termination. In this case, the
landlord provided a 72-hour notice of termination.
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         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.
When a tenant “remains in possession after a valid notice
terminating the tenancy pursuant to ORS chapter 90,” or
the tenant fails to pay rent within 72 hours of the notice
required by ORS 90.394, a tenant “unlawful[ly] hold[s]
by force.” ORS 105.115(2)(a)(A) - (B). And, when a tenant
“unlawful[ly] hold[s] by force,” a landlord may bring an FED
action to recover possession. ORS 105.110. A landlord may
not commence an FED action for the return of possession
until “after the expiration of the time period provided in a
notice terminating the tenancy.” ORS 105.115(2)(b).
          As noted, in this case, landlord delivered two notices
of termination, and each notice gave tenant a different dead-
line to make the payment described in the notice. Landlord
determined that those deadlines had passed, and, on May 1,
2017, landlord commenced this FED action by filing a com-
plaint using the form provided in ORS 105.124. In such a
complaint, a landlord must allege the notice that entitles the
landlord to possession and indicate the statutory basis for
the notice. ORS 105.124(1).5 The landlord also must attach a
copy of the notice to the complaint. ORS 105.124(3). If using
the statutory form, the landlord may check a box indicat-
ing, for instance, that the landlord is entitled to possession
because of a “72-hour or 144-hour notice for nonpayment of
rent” under ORS 90.394 or because of “30-day notice with
stated cause” under ORS 90.392. Each of those two statutes
sets forth a “remedy,” which a landlord may pursue in an
FED action. ORS 90.401(1).6
         Here, landlord used the statutory form, but did not
check a box indicating the notice that entitled it to posses-
sion or the statutory basis for the notice. Landlord did, how-
ever, attach a notice to the complaint—the 72-hour notice.
Landlord did not indicate in any way that it was relying
    5
      ORS 105.124(1) provides that a landlord’s complaint “must be in sub-
stantially the following form” and then sets out a form complaint with those
components.
    6
      ORS 90.401(1) states that “[a] landlord may pursue any one or more of the
remedies set forth in ORS 90.392, 90.394, 90.396, 90.398, 90.403, and 90.405,
simultaneously or sequentially.”
212                                      C.O. Homes, LLC v. Cleveland

upon the 30-day “for cause” notice and did not attach that
notice to the complaint.
          Landlord served tenant with the complaint and
a summons in the form provided in ORS 105.113.7 Such a
summons must include a first-appearance date and must
inform the tenant what will happen at that appearance:
(1) the judge may ask the parties to try to reach a voluntary
agreement; (2) if the parties do not reach an agreement or
the tenant does not agree to move out, the court will sched-
ule a trial; and (3) if the tenant wants a trial, the tenant
must file an answer giving a reason why the tenant should
not be evicted and pay a filing fee. ORS 105.135(2), ORS
105.113. If the tenant does not want a trial and does not
contest the action, attorney fees may not be awarded to the
landlord. ORS 105.137(3).
         In this case, the parties attended a first-appearance
hearing on May 10, 2017. They did not settle their dispute
at that hearing and, later that day, tenant filed an answer.
ORS 105.137 provides a statutory form for an answer
and designates the required content of the answer.8 Such
an answer must deny that the landlord is entitled to pos-
session and give the reason, including, for instance, that
“[t]he eviction notice is wrong.” ORS 105.137(7)(b). In this
case, tenant did not use the statutory form for her answer,
but she alleged that landlord was not entitled to posses-
sion because “[t]he notice of termination filed in this case is
wrong.”
        On June 6, 2017, two days before trial, landlord filed
a motion, pursuant to ORCP 23, seeking leave to amend
its complaint to attach the 30-day “for cause” notice. In its
motion to amend, landlord cited ORCP 23 A9 and ORCP
     7
       ORS 105.113 provides that the summons “must be in substantially the fol-
lowing form” and then sets out a form summons.
     8
       ORS 105.137(7)(b) explains that a tenant’s answer “shall be in substan-
tially the following form” and then sets out a form answer.
     9
       ORCP 23 A provides:
         “A pleading may be amended by a party once as a matter of course at
     any time before a responsive pleading is served or, if the pleading is one to
     which no responsive pleading is permitted, the party may so amend it at any
     time within 20 days after it is served. Otherwise a party may amend the
     pleading only by leave of court or by written consent of the adverse party; and
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23 B10 and argued that it should be allowed to attach the
30-day notice because tenant was aware of the notice, the
proposed amendment would conform to the evidence, and
tenant would not be prejudiced by allowing the amendment.
The trial court considered landlord’s motion at a pretrial
hearing on the morning of trial. At that hearing, tenant
opposed the motion, and, in the alternative, requested that
the court postpone the trial. Tenant admitted that she had
received the 30-day notice, but argued that the amendment
would add a new claim for relief and that she would be prej-
udiced if landlord were permitted to rely on that notice for
its claim for possession.
         The trial court allowed landlord to amend its com-
plaint, and it did not postpone the trial. In the court’s view,
landlord’s claim was a claim that tenant had not made the
required security-deposit payments, and attaching the
30-day notice to the complaint would not change that claim
or prejudice tenant.
        After landlord presented its case at trial, tenant
moved for a directed verdict. Regarding the landlord’s
72-hour notice, tenant argued that, under ORS 90.394, a
landlord may not use a 72-hour notice to terminate a rental
agreement for the nonpayment of a security deposit. A

   leave shall be freely given when justice so requires. Whenever an amended
   complaint is filed, it shall be served upon all parties who are not in default,
   but as to all parties who are in default or against whom a default previously
   has been entered, judgment may be rendered in accordance with the prayer
   of the original pleading served upon them; and neither the amended pleading
   nor the process thereon need be served upon such parties in default unless the
   amended pleading asks for additional relief against the parties in default.”
   10
      ORCP 23 B provides:
        “When issues not raised by the pleadings are tried by express or implied
   consent of the parties, they shall be treated in all respects as if they had
   been raised in the pleadings. Such amendment of the pleadings as may be
   necessary to cause them to conform to the evidence and to raise these issues
   may be made upon motion of any party at any time, even after judgment; but
   failure so to amend does not affect the result of the trial of these issues. If evi-
   dence is objected to at the trial on the ground that it is not within the issues
   made by the pleadings, the court may allow the pleadings to be amended
   when the presentation of the merits of the action will be subserved thereby
   and the objecting party fails to satisfy the court that the admission of such
   evidence would prejudice such party in maintaining an action or defense
   upon the merits. The court may grant a continuance to enable the objecting
   party to meet such evidence.”
214                                     C.O. Homes, LLC v. Cleveland

landlord may use such a notice only to terminate a rental
agreement for nonpayment of rent, and the definition of
“rent” under ORS 90.100(37) specifically excludes security
deposits.11 Therefore, tenant argued, the 72-hour notice was
invalid. Tenant also argued that she should prevail on land-
lord’s 30-day notice claim because landlord had not proved
(1) that it had properly delivered the 30-day notice, (2) that
the 30-day notice had been attached to the complaint, or
(3) that the contents of the 30-day notice, such as the dead-
line for cure, were valid.
        The trial court agreed with tenant that the 72-hour
notice was invalid and granted her motion for a directed ver-
dict as to that notice. However, the court denied tenant’s
motion as to the 30-day notice. When the court did so,
tenant renewed her request to postpone trial, arguing that
she needed time to prepare a defense against that notice.
The trial court again denied that request and ultimately
granted landlord possession based on the 30-day notice.12
Tenant appealed, and the Court of Appeals affirmed with-
out opinion. C.O. Homes, LLC v. Cleveland, 

,

 (2019). Tenant sought, and we allowed, review.
                                 ANALYSIS
         The issue before us is whether the trial court erred
when it allowed landlord to amend its complaint pursuant
to ORCP 23.13 The Oregon Rules of Civil Procedure apply in
FED actions “ ‘except where a different procedure is speci-
fied by statute or rule.’ ” Balboa Apartments v. Patrick, 

, 

 (2011) (quoting ORCP 1). The

     11
        ORS 90.100(37) defines “rent” as “any payment to be made to the landlord
under the rental agreement, periodic or otherwise, in exchange for the right of a
tenant and any permitted pet to occupy a dwelling unit to the exclusion of others
and to use the premises. ‘Rent’ does not include security deposits, fees or utility
or service charges as described in ORS 90.315 (4) and 90.562.”
     12
        Both landlord’s original complaint and landlord’s amended complaint con-
tained a request for attorney fees. After the trial, however, landlord informed the
court that it was not requesting attorney fees under ORS 90.255. Accordingly, the
trial court did not award them.
     13
        Tenant also raises the issue of whether the trial court erred in denying
her motion to postpone the trial. Because we conclude that the trial court abused
its discretion in allowing landlord’s motion to amend its complaint, we need not
reach the postponement issue.
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parties have not identified any such statute or rule, and we
therefore begin our analysis with ORCP 23 A.
         Under that rule, when a party may no longer amend
his or her complaint as a matter of course, a party may
“amend the pleading only by leave of court or by written
consent of the adverse party.” ORCP 23 A. Leave “shall be
freely given when justice so requires.” 

 Generally, “[i]n all
circumstances in which the consent of the court is required,
the court retains discretion to deny the motion.” Finney v.
Bransom, 

, 

 (1998); see also Sheets
v. Knight, 

, 236 n 15, 

 (1989) (“The
general rule [under ORCP 23 A] is that ‘a ruling on a motion
to amend pleadings is within the discretion of the trial court
and that this court will not reverse the trial court on such a
matter unless a manifest abuse of discretion has occurred.’ ”
(Quoting Pacific Form Corp. v. Burgstahler, 

,

 (1972).)), abrogated on other grounds by McGanty
v. Staudenraus, 

, 

 (1995).
         In making their arguments about whether the trial
court abused its discretion in allowing landlord’s pretrial
motion to amend, the parties rely on cases decided before the
Oregon Rules of Civil Procedure were promulgated in 1979.
ORCP 23 repealed and replaced former ORS 16.390 (1965).
That statute similarly provided, in part, that a “court may,
at any time before trial, in furtherance of justice and upon
such terms as may be proper,” permit an amendment. And,
under that statute, appellate courts reviewed a trial court’s
decision permitting, or denying, a motion to amend plead-
ings for abuse of discretion. See Morrill v. Rountree, 

, 

 (1965) (noting that, under former ORS
16.390 (1965), repealed by Or Laws 1979, ch 284, § 199, a
decision allowing or refusing an amendment is within “the
sound discretion of the trial court, [and] that discretion must
be exercised in furtherance of justice and may not be used to
defeat justice”).14
    14
       ORCP 23 was intended to combine existing Oregon statutes and
Rule 15 of the Federal Rules of Civil Procedure. See Oregon Rules of Civil
Procedure, Promulgated by the Council on Court Procedures, 71 (Dec 2, 1978),
http://counciloncourtprocedures.org/Content/Promulgations/1978_original_
ORCP_promulgation.pdf (accessed Mar 2, 2020) (comment to ORCP 23). FRCP
15(a) provided that leave to amend “ ‘shall be freely given when justice so
216                                     C.O. Homes, LLC v. Cleveland

          In this case, no party contends that the promulga-
tion of ORCP 23 made a substantive change in the law as it
applies to the pretrial amendment of pleadings, and, at least
for purposes of deciding the issue before us, we find the pre-
1979 cases that the parties cite both helpful and persuasive.
Under those cases, the gravamen of the inquiry is whether
allowing a pretrial amendment would unduly prejudice the
opposing party. See Quirk v. Ross, 

, 

 (1970) (explaining that a motion to amend should be
allowed “unless the other party will be prejudiced in some
respect”); Oregon P.O. Bldg. Corp. v. McVicker, 

, 

 (1967) (explaining that “[i]t is important
to consider the effect of the amendment upon the adverse
party”); see also Reeves v. Reeves, 

, 

 (2005) (explaining that the “longstanding rule” is
that “an amendment should be allowed unless the other
party is prejudiced”); Franke v. ODFW, 

,

 (2000) (holding that, “in the absence of prejudice
to plaintiff arising from the delay in asserting the defense,
* * * the trial court abused its discretion in denying defen-
dants’ motion for leave to amend their answers”).
         In evaluating whether such prejudice exists, a court
considers factors such as whether the party opposing the
motion had “a reasonable opportunity to research appro-
priate law, move against the pleading, avail [himself or
her]self of discovery procedures, and prepare requested
instructions.” Oregon P.O. Bldg. Corp., 

.
“Generally, the further a case proceeds, the more reluctant
the courts are to permit amendments.” Perdue v. Pac. Tel.
& Tel. Co., 

, 

 (1958); see also
Sheets, 

 n 15 (trial court’s decision denying
plaintiff’s motion to amend complaint on the morning of trial
was proper under ORCP 23 A). Another important consider-
ation in assessing prejudice is whether the proposed amend-
ment would change the claim for relief. A court may allow

requires.’ ” See Foman v. Davis, 

, 

, 

 (1962)
(quoting FRCP 15(a)). Under FRCP 15(a), “the grant or denial of an opportunity to
amend is within the discretion of the District Court.” 

 In the absence of “undue
delay, bad faith or dilatory motive on the part of the movant, repeated failure
to cure deficiencies by amendments previously allowed, undue prejudice to the
opposing party by virtue of allowance of the amendment, [or the] futility of [the]
amendment,” leave should be freely given. 

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a motion to amend “if there is no prejudice to the defendant
and no material change in the substance of the complaint.”
See Oak Grove Parr v. McCutcheon Const., 

,

 (1976); see also Alexander v. State of Oregon,

, 

 (2017) (explaining that
“trial courts have ‘ample discretionary authority to allow
amendments, provided the proffered amendment does not
substantially change the cause of action or inject an entire
new element of damage’ ” (quoting Cutsforth v. Kinzua Corp.,

, 

 (1973))). By the same token,
if a proposed amendment would change the claim for relief
and prejudice the opposing party, a court may deny a motion
to amend. See Humbird v. McClendon, 

, 

 (1978) (holding it was not an abuse of discretion to
deny a motion to amend where amendment changed theory
of the case).
         In this case, landlord’s argument that its proposed
amendment did not unduly prejudice tenant begins from the
premise that the amendment did not, as landlord puts it, add
a new “basis for recovery.” As noted, before landlord filed its
complaint, it issued two notices to tenant—a 30-day notice
under ORS 90.392 and a 72-hour notice under ORS 90.394—
and each notice purported to terminate the parties’ rental
agreement due to tenant’s failure to make security-deposit
payments. Landlord does not dispute the trial court’s con-
clusion that the 72-hour notice was invalid. It argues, how-
ever, that the 72-hour notice provided the tenant with the
same substantive information as did the 30-day notice: Both
notices informed tenant that her security-deposit payments
were past due and stated that landlord intended to termi-
nate tenant’s lease due to her failure to make those pay-
ments. According to landlord, attaching the 30-day notice
did not change the basis for the termination of the tenancy,
or consequentially, its “basis for recovery.”
         Tenant sees the two notices differently. She argues
that separate statutes describe the different notices that
permit a landlord to terminate a residential rental agree-
ment in different factual circumstances. In this case, tenant
observes, the two notices on which landlord relied were
delivered “on different days, by different individuals, with
different deadlines to comply,” and each permitted tenant
218                            C.O. Homes, LLC v. Cleveland

to assert different defenses—some of which did not depend
on whether tenant had in fact failed to make her security-
deposit payments. From tenant’s perspective, to prove that
a landlord is entitled to possession, the landlord must prove
more than that a tenant has violated the rental agreement.
The landlord also must demonstrate that it delivered a par-
ticular, valid notice that effectively terminated the rental
agreement.
         As is evident from the parties’ arguments, they
have conflicting understandings of what constitutes an
FED “claim” for possession of a residential dwelling unit
and what constitutes a change in such a claim. This court
has recognized “that the definition of a claim for relief * * *
will vary depending on the context in which that phrase is
used.” Ram Technical Services, Inc. v. Koresko, 

,
236 n 12, 

 (2009). When the context is whether
a trial court erred in permitting a party to amend its com-
plaint, this court uses the definition of a “claim” set out
in Elliot v. Mosgrove, 

, 

 (1939)
(on rehearing). Ram Technical Services, Inc., 

(discussing Elliot). In Elliot, the question was whether the
trial court had abused its discretion in allowing a plaintiff
to amend his complaint because, according to the defen-
dant, the amended complaint had “substantially change[d]”
the claim for relief. 

. Elliot defined a claim as
“an aggregate of operative facts which give rise to one or
more relations of right-duty between two or more persons.”

. As the court in Elliot explained, “[the] test is not
absolute identity of all the operative facts, but whether the
number of operative facts common to each situation is suffi-
ciently large to make the treatment of the [claim] as a unit
desirable for convenient and efficient trial work.” 

.
In Elliot, this court held that the trial court did not abuse its
discretion when it allowed a proposed amendment because,
“after its allowance neither party felt it was necessary to
offer additional proof.” 

.
         Applying that definition, we must analyze the
operative facts that give a landlord the right to possession
of a dwelling unit subject to the ORLTA. As explained at
the outset, the FED statutes permit a landlord to bring an
action to recover possession of such premises when a tenant
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unlawfully holds possession “by force,” ORS 90.110, and, as
relevant here, a tenant does so when the tenant “remains
in possession after a valid notice terminating the tenancy
pursuant to ORS chapter 90” or fails to pay rent within
72 hours of the notice required by ORS 90.394, ORS
105.115(2)(a)(A) - (B) (emphasis added). A landlord may not
file an action for the return of possession until after the expi-
ration of the time period provided in the notice terminating
the tenancy. ORS 105.115(2)(b). A landlord’s complaint must
allege that the landlord is entitled to possession, specify
the particular notice that entitles the landlord to posses-
sion, and provide the statutory basis for that notice. ORS
105.124. Each particular notice is a different “remedy” that
a landlord may pursue to terminate a rental agreement.
ORS 90.401. Thus, the operative facts in an FED action for
possession of a dwelling unit governed by the ORLTA are, at
a minimum, that the landlord gave the tenant a valid notice
in accordance with a particular statutory provision of the
ORLTA and that the tenant remained in possession of the
unit after the time period specified in the notice expired. A
tenant’s violation of a rental agreement may give a landlord
the right to give a notice of termination, but it is the partic-
ular notice, and not the violation, that entitles a landlord to
assert a claim for possession.15
         In this case, then, it is apparent that landlord’s
original claim for relief was a claim that landlord was enti-
tled to possession based on a 72-hour notice of termination
under ORS 90.394, which permits a landlord to terminate
a rental agreement for nonpayment of rent. Although the
72-hour notice informed tenant that she had failed to make
required security-deposit payments, there was nothing in
that notice or in the original complaint informing tenant
that landlord was basing its claim for possession on ORS
90.392, the statute that entitles a landlord to possession for
a material breach of a rental agreement, or on the 30-day
“for cause” notice permitted by that statute.
    15
       In turn, the validity of the notice in any given case may depend on a num-
ber of things. In this case, for instance, tenant argued that the 72-hour notice
was invalid because a landlord may not use a 72-hour notice to terminate a rental
agreement for the nonpayment of a security deposit, and, as discussed below,
tenant contends that she could have argued that the 30-day notice was invalid
because it was not delivered 14 days before the deadline for cure.
220                                      C.O. Homes, LLC v. Cleveland

         Thus, when landlord sought to amend its complaint
to add a 30-day “for cause” notice, it substantially changed
the operative facts on which its claim was based. And,
unlike the party opposing the amendment in Elliot, tenant
here considered it “necessary to offer additional proof,” to
contest the 30-day notice. 

. The 30-day notice
was not delivered on the same date as the 72-hour notice,
and its validity depended on different facts, including
whether it provided tenant with enough time, as required
by ORS 90.392, to cure the alleged violation of the rental
agreement.
          As discussed, the question then becomes whether
landlord’s proposed amendment was likely to result in undue
prejudice. Here, landlord argues that tenant was not preju-
diced by the addition of the 30-day notice because, when it
filed its original complaint, tenant already had received that
notice and was aware that landlord was claiming that she
had failed to make security-deposit payments. Thus, land-
lord contends, when tenant received landlord’s complaint,
she already had all the information she needed to address
the merits of landlord’s claim for possession.
          Tenant’s argument that landlord’s amendment was
unduly prejudicial is two-fold. First, tenant argues that,
although she was prepared to challenge the validity of the
72-hour notice at trial, she was not prepared to address the
validity of the 30-day notice; she was not aware that landlord
would rely on that notice until two days before trial. Tenant
posits that she could have prepared successful defenses
to the 30-day notice if she had been given time to do so.
For example, she suggests that she could have challenged
whether delivery of the 30-day notice was timely and had
given her enough time to cure, as required by ORS 90.392
(4)(a)(A).16

     16
        Landlord testified at trial that it had mailed the 30-day notice on March 24,
2017, but tenant asserts that the envelope tenant received with that notice
had a postmark of March 27. According to tenant, if the letter was actually
sent on March 27, the deadline to cure provided in the notice would have been
incorrect: Under ORS 90.392(4)(a)(A), a tenant must be given 14 days from receipt
of the notice to cure the alleged violation, and here, the date by which tenant had
to cure was April 7, 2017. Tenant argues that, had she known that the 30-day
notice was going to be at issue, she could have prepared to contest its timeliness.
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         Second, tenant argues that she was prejudiced in
that, by the time landlord filed its motion to amend, she
already had made certain consequential strategic decisions
regarding her case. At the first-appearance hearing, tenant
was given, as the FED statutes require, an opportunity to
settle the case without incurring the costs and risks asso-
ciated with going to trial. Believing—correctly—that her
defense to landlord’s claim based on the 72-hour notice was
strong,17 tenant decided to contest the eviction. Tenant filed
an answer, and, in doing so, she exposed herself to a poten-
tial award of attorney fees. Once tenant contested the case,
she was not entitled to another “first appearance” hearing
or to any other statutory procedure that would enable her to
reevaluate whether to contest landlord’s claim and thereby
avoid that exposure.
         We agree with tenant’s argument as to the preju-
dice she was facing. As we have explained, landlord’s claim
to possession depended not only on whether tenant had
violated the rental agreement, but also on whether land-
lord had properly terminated that agreement by providing
tenant with a valid notice of termination. Landlord’s pro-
posed amendment added a new claim for relief and tenant
had insufficient time to address that claim. Perhaps even
more significantly, landlord’s motion came after tenant had
filed her answer contesting the action and exposing her to
potential liability for attorney fees. In considering landlord’s
motion to amend under ORCP 23 A, the trial court failed to
recognize that landlord’s claim had changed and that tenant
would be unduly prejudiced by that change. The trial court
abused its discretion in granting landlord’s motion under
ORCP 23 A.18
     17
        As noted, the trial court granted tenant’s motion for directed verdict as to
landlord’s 72-hour notice claim, and landlord does not challenge that ruling on
appeal.
     18
        Landlord argues that any abuse of discretion in allowing the amendment
was harmless. As we understand landlord’s argument on that score, it mirrors its
argument that the trial court did not err in permitting the amendment. Landlord
asserts that allowing the amendment was harmless because tenant had received
the 30-day notice before trial and both the 72-hour notice and the 30-day notice
informed tenant that landlord was terminating their agreement due to the non-
payment of the security deposit. We reject landlord’s harmless-error argument
for the same reasons that we conclude that the trial court erred in allowing land-
lord’s motion to amend.
222                                      C.O. Homes, LLC v. Cleveland

         That conclusion does not, however, resolve this
case. We must turn, however briefly, to landlord’s alterna-
tive argument that the trial court’s decision was not an
error when evaluated under ORCP 23 B. One circumstance
in which ORCP 23 B applies is when “issues not raised by
the pleadings are tried by express or implied consent of the
parties.”19 In that circumstance, the rule permits a court to
allow an amendment to “conform to the evidence.” 

          In this case, landlord argued at the pretrial hearing
on landlord’s motion to amend that its proposed amendment
should be allowed because it would conform to the evidence
at trial. At that time, however, no issue had been “tried by
the express or implied consent of the parties.” The trial had
not started, and tenant had objected, rather than consented,
to enlarging the scope of the pleadings to permit trial of
issues related to the 30-day notice.
          Perhaps recognizing the difficulty of fitting a square
peg into a round hole, landlord makes a different argument
here than it did below. Landlord acknowledges that, after
it offered the 30-day notice as evidence at trial, tenant
objected. Landlord points out, however, that tenant does not
challenge that evidentiary ruling on appeal. Landlord seems
to argue that tenant’s failure to do so constitutes “consent”
to trial of the issues relating to the 30-day notice. Landlord’s
argument is without merit. By objecting below to landlord’s
pretrial motion to amend and assigning error to that deci-
sion on review, tenant did all that was necessary to present
that issue for our consideration. Tenant’s failure to assign
error to a different trial court ruling is immaterial to the
issue that we decide today—that the trial court abused its
discretion in granting landlord’s pretrial motion to amend
its complaint.20
    19
       ORCP 23 B also applies if “evidence is objected to at the trial on the ground
that it is not within the issues made by the pleadings.” In that circumstance,
the court may allow the pleadings to be amended “when the presentation of the
merits of the action will be subserved thereby and the objecting party fails to
satisfy the court that the admission of such evidence would prejudice such party
in maintaining an action or defense upon the merits.” ORCP 23 B. Landlord
does not appear to argue that we should affirm the trial court’s ruling on those
grounds.
    20
       The case on which landlord relies—Engelcke v. Stoehsler, 

,

 (1975)—does not advance landlord’s arguments. In Engelcke, the
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                              CONCLUSION
        In sum, because landlord’s proposed amendment
substantially changed its claim for relief and prejudiced
tenant, the trial court abused its discretion when it allowed
landlord to attach the 30-day “for cause” notice to its
complaint.
        The decision of the Court of Appeals is reversed.
The judgment of the circuit court is reversed, and the case
is remanded to the circuit court for further proceedings.




party moving to amend did so after it had presented its case at trial, and, when
we held that the motion to amend in that case should have been granted, we
noted that there had been no objection during trial to the evidence that permitted
the amendment. Id. at 941, 945. Those circumstances are not present in this case;
here tenant objected to landlord’s pretrial motion to amend.