Oregon Supreme Court finds no right to jury trial for enforcement of settlement agreement

In McDowell Welding & Pipefitting, Inc. v. U.S. Gypsum Co. et al., the Oregon Supreme Court recently held that specific enforcement of a settlement agreement taking the form of an executory accord is an equitable claim, as opposed to a legal claim, and is not subject to a jury trial.

The case involved a dispute over the defendants’ alleged failure to pay for work that plaintiff had done on a construction project. In answer to the plaintiff’s allegations, the defendants claimed as an affirmative defense that plaintiff had agreed to release its claims in return for an agreed-upon sum. The defendants also counterclaimed for specific performance of the settlement agreement. On the defendants’ motion, the trial court agreed to try defendants’ counterclaim for specific performance of the settlement agreement before trying plaintiff’s claims for breach of the construction contract.

In holding that the plaintiff did not have a constitutional right to a jury trial on the issue of specific performance of the settlement agreement, the Court noted that the right to a jury trial does not extend to cases that would have been tried to an equity court at the time the Oregon Constitution was adopted. After considering the three forms a settlement agreement may take – executory accord, accord and satisfaction, or a substituted contract – the Court found that the settlement agreement at issue was an executory accord since the defendants alleged that the plaintiff agreed to release its claims only after the defendants made the promised payment. The Court observed that executory accords were historically not cognizable at law. In response to the plaintiff’s alternative argument that the defendants’ affirmative defense required a jury trial, the Court noted that because the affirmative defense involved an executory accord, it too was an equitable claim not subject to a jury trial.

The Supreme Court affirmed the trial court’s finding that the parties had agreed to a settlement and remanded the case to the trial court for a determination of prejudgment interest.