Northwest Business Litigation

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.

No common law wrongful death claim in Oregon, high court rules

In a much-anticipated ruling, the Oregon Supreme Court today in Hughes v. Peacehealth held that there is no common law wrongful death cause of action in Oregon.  Plaintiffs in numerous wrongful death cases over the years have argued in favor of a wrongful death claim outside of the statutory claim allowed under Oregon law. Today, the Supreme Court unequivocally ruled that no such claim existed at the time of the drafting of the Oregon Constitution in 1857. 

At issue in the case was whether the plaintiff could pursue--under a common law theory--non-economic damages in excess of the $500,000 limit imposed by statute.  Plaintiff argued that the limitation violates both Article 1, section 10 and section 17 of the Oregon Constitution.  Those sections protect remedies available at common law and the right to a jury trial, respectively.  Shooting down both arguments, the Court stated, "[T]he view expressed by this court in previous cases--that wrongful death in Oregon is purely statutory and has no secure basis in the common law as it existed in 1857--is correct."  You can access the opinon here.

Oregon Supreme Court ends cap on claims against public employees

On December 28, 2007, the Oregon Supreme Court held that the damage cap in the Oregon Tort Claims Act (OTCA) violates the Remedy Clause in Article 1 Section 10 of the Oregon Constitution when it was applied to claims against employees of public bodies.  In Clarke v. OHSU the plaintiff claimed over $15,000,000 in damages as a result of the negligence of OHSU and certain of its staff members. The OTCA limited the available damages to $200,000. 

The Remedy Clause states that “every man shall have remedy by due course of law for injury done him in his person, property, or reputation.”  In order to establish that the legislature has violated the Remedy Clause by abolishing a cause of action, a plaintiff must first show that the common law of Oregon recognized a cause of action for the alleged injury in 1857, when the drafters wrote the Oregon Constitution. Once this is established a plaintiff must then show that the legislature has not provided an adequate substitute remedy for the common law cause of action it abolished. 

The opinion, written by Chief Justice Paul J. De Muniz, held that the damage limitations in the OTCA were constitutional as applied to the claims against OHSU, because OHSU was an instrumentality of the state and therefore would have been protected from lawsuits in 1857 under the doctrine of sovereign immunity.  The court also held, however, that the OTCA requirement that OHSU be substituted as defendant in the place of its staff members—which resulted in the cap on damages being applied to the claims against the staff members—violated the Remedy Clause.  Employees of public bodies were liable for negligence in 1857. By subjecting claims against such employees to the damage cap, the legislature violated the Remedy Clause because the substituted remedy was inadequate: “an emasculated version of the remedy that was available at common law.”

Justice Thomas A. Balmer, joined by Justice Rives Kistler, concurred, noting that the remedy for medical malpractice claims against OHSU “should have been increased long ago by the legislature.”  The concurrence also emphasized that while the OTCA provisions were unconstitutional because they did not provide a substantial remedy to medical malpractice claims as a class, there are situations in which statutory limits on damages are constitutional even though the statutes might “limit the damages that can be recovered by a particular plaintiff for a particular claim.” 

The Ohio Supreme Court also issued an opinion dealing with damage caps last week.  It upheld as constitutional caps on noneconomic and punitive damages included in recent tort reform legislation. 

Oregon Supreme Court Sidesteps Issue of "Common Law Wrongful Death"

In an En Banc decision, the Oregon Supreme Court in Juarez v. Winsor Rock Products, Inc. sidestepped the one issue the parties and many others in Oregon have argued recently; namely, whether Oregon recognizes a cause of action for "common law wrongful death." 

Following the workplace death of Felix Juarez, his adult children and mother brought a claim for "loss of society, companionship, guidance, emotional support, services and financial assistance."  Because in this situation the workers' compensation system only allows a burial payment and no compensation to the adult children and parents of the decedent, and because the workers' compensation system provides the exclusive remedy for workplace injuries, plaintiffs sued in civil court.  There they sought the typical statutory wrongful death damages and argued that the workers' compensation system violates Article I, section 10 of the Oregon Constitution by depriving them of a common law remedy (a wrongful death cause of action) available in 1857 when the Constitution was adopted.

Applying the methodology adopted in an earlier case, Smothers v. Gresham Transfer, Inc., the court concluded that the plaintiffs' claims for "loss of society, companionship, guidance, emotional support, services and financial assistance" did not include an injury to one of the rights protected by Article I, section 10.  Accordingly, without even deciding whether Oregon recognizes a cause of action for "common law wrongful death," the court affirmed the lower court's dismissal of the lawsuit.

You may view the entire opinion at:  http://www.publications.ojd.state.or.us/S52352.htm