SUIT MAY CHANGE HOW LANDLORDS OPERATE

A Settlement, In A Case Where A Man Fleeing A Problem Residence Caused A
Woman's Death, Serves As A Warning

Gregory Amerson and his sisters talked to at least eight attorneys before
they finally found one who would take their groundbreaking case against the
landlord of a suspected drug house in Northeast Portland.

It was a lawsuit that apparently had never been tried in Oregon, maybe never
in the United States, as far as anyone could tell. And a lot of lawyers
thought it was a stretch.

The issue? Was the landlord liable for the death of Amerson's mother, E.
Jean Amerson, who was killed in December 1996 when a criminal suspect left
the house, sped from police and crashed into the 68-year-old woman's car? If
the landlord knew or should have known drugs were being dealt out of the
house, should he have evicted the tenants and possibly prevented the fatal
crash?

The case went to trial last week in Multnomah County Circuit Court. But
before a jury could answer those questions, Amerson's four adult children
settled the lawsuit. The landlord, Charles Bernards of Tigard, and his
company, Venture B.C. Inc., settled for $250,000. Insurance will cover
$150,000. But Bernards, who owns at least eight Portland rental properties,
must pay $100,000.

Because the lawsuit was settled, it does not have the precedent value of a
case tried, appealed and ruled on by an appellate court. Still, the case has
the potential to change the way landlords do business. Already, the law firm
that represented Amerson's family has used it to encourage another landlord
to evict tenants from a problem house.

The case might even convince some landlords to get out of the business, said
Emily Cedarleaf, executive director of the Multifamily Housing Council of
Oregon, the largest trade association for rental property owners in Oregon.

At the least, she said, landlords are going to be responsible for more
community policing. "For us, it's going to mean that landlords are going to
be held to a higher standard," Cedarleaf said. "This one is going to be scary."

Law enforcement officials already see the case as another tool to fight drug
houses. Jim Hayden, the neighborhood deputy district attorney for North and
Northeast Portland, hopes that neighbors of suspected drug houses will take
the next legal step and sue landlords for the disruption and diminishment of
property values the houses cause.

"I think the implications are tremendous," Hayden said. "I intend, when I
deal with landlords who are not minding their p's and q's, to tell them
about this case."

Screening tenants

For Circuit Judge Michael Marcus, who was assigned the case and is an expert
in landlord/tenant law, the message to landlords is to screen tenants. In
this case, Venture B.C. and Bernards were negligent because they never
discovered that the tenants were evicted from their previous rental unit
because of drug activity, according to court documents filed by Amerson's
lawyers.

But for the defendants, this is a case of small-business owners who felt
squeezed by the legal system. Bernards said no one has ever proved to him
that drugs were being sold by the tenants living in the house at that time.
He settled the lawsuit, he said, because he could not borrow money while the
lawsuit was pending, because the strain was tremendous and because of many
other reasons. But he still says he didn't do anything wrong.

"We're not willing to spend five years of our lives on something that we had
nothing to do with," Bernards said.

There is conflicting evidence about whether the house in the 4800 block of
Northeast 22nd Avenue was a drug house in 1996 and how much Bernards knew.

The house has a history of complaints. Portland police began keeping a log
of drug-related complaints on the house in 1989, a year before Bernards
bought it. Then twice in 1993, police wrote Bernards about tenants suspected
of dealing drugs. Officers also served a search warrant in February 1993.
Bernards said that he evicted the tenants who were the subject of the search
warrant and that the subsequent tenants moved out before he could evict them.

Then in early 1996, police received complaints from a neighbor of late-night
activity, people walking out of the house with small plastic bags and
syringes lying in the yard. In the police log, two officers noted in June
1996 that someone probably was dealing methamphetamine from the house and
that stolen vehicles often were parked in front.

On Aug. 30, 1996, the Drugs and Vice Division wrote Venture B.C., notifying
the landlord that police had received complaints of drug activity and
warning that the city might shut down the house under its drug house
ordinance if the landlord failed to act. Bernards returned the call but had
trouble hooking up with the officer assigned to the case.

Bernards said he repeatedly visited the house in late 1996 and never saw any
evidence of drugs. At least twice, police tried to buy drugs at the house
using an informant but were unsuccessful.

On Dec. 13, 1996, police had the house under surveillance. When officers ran
a check on the license plate of a car parked in front, they found the
registered owner had an arrest warrant. Another man, whom police later
identified as Michael Eric Nitschke, walked out of the house and got into
the car. Police followed and tried to pull him over. But Nitschke sped away,
and police broke off the chase. At the intersection of Northeast 29th Avenue
and Bryce Street, Nitschke smashed into Jean Amerson's car. The
great-grandmother was on her way to buy Christmas presents. She died the
next day.

Manslaughter conviction

Nitschke was convicted of first-degree manslaughter, driving under the
influence of intoxicants and six other charges.

Amerson's family first sued the city and the Police Bureau for chasing
Nitschke. But they dropped that suit after learning that police followed
their policies and broke off the pursuit within seconds of Nitschke speeding
away because it was too dangerous, Gregory Amerson said.

Then they sued Venture B.C.,Bernards and a partner. Later, they amended the
suit to drop the partner and demand $2.5 million.

The family claimed the landlord was liable under two theories, common-law
negligence and violation of a state law that makes it a crime to knowingly
allow a property to be used to sell illegal drugs. Prosecutors almost never
charge people with the crime because it is so difficult to prove that a
person knew beyond a reasonable doubt, said Mark McDonnell, a Multnomah
County senior deputy district attorney who heads the drug unit. But in a
civil case, the proof is only a preponderance of the evidence, meaning that
it is more likely than not that the landlord knew. The key issues the
Amerson family had to prove were whether the landlord failed to use
reasonable care and whether it was foreseeable that the negligence could
lead to Amerson's death.

"It was a difficult legal question, no doubt about it," said Bernard Jolles,
the lawyer who eventually took on the case for Amerson's family.

The Dram Shop Act

The case is similar to lawsuits based on Oregon's Dram Shop Act, which says
restaurant and tavern operators can be held liable for a patron's actions
off the premises if the nightspot served the patron while he or she was
visibly drunk.

The most analogous case was a dog-bite lawsuit in which a family sued a
landlord after their daughter was bitten by a tenant's dog in a parking lot
next to the rental property. The Oregon Supreme Court ruled in 1993 that a
landlord could be held liable for an injury the tenant's dog caused off the
rental property only if the landlord allowed the tenants to have a dog and
knew the dog caused an unreasonable risk to people off the property. In that
case, the landlord knew the county had posted a "potentially dangerous dog"
sign on the landlord's property.

In the case against Bernards, Gregory Amerson said the family sued not for
money but to show landlords they have a responsibility to the larger community.

"It was about having this case prevent this from happening to another
family," Amerson said. "It was the fact that we wanted our mother's death to
mean something."