22
Argued and submitted August 16, reversed and remanded September 13, 2023
Richard WALL,
Plaintiff-Appellant,
v.
Ed ASH,
dba Ash Racing Components,
Defendant-Respondent.
Douglas County Circuit Court
20CV05582; A175911
536 P3d 1101
Plaintiff appeals a judgment dismissing the present action against defendant, in which plaintiff sought damages for defendant’s alleged breach of the
parties’ settlement agreement from a prior action. The trial court dismissed the
present action after granting summary judgment for defendant on the basis that
the present action was barred by plaintiff’s voluntary dismissal with prejudice of
the prior action. Held: The Court of Appeals concluded that the trial court erred
as a matter of law in granting summary judgment for defendant on the basis that
dismissal of prior action precluded the present action.
Reversed and remanded.
Frances Elaine Burge, Judge.
Christopher W. Peterman argued the cause for appellant.
Also on the brief was Keith D. Ropp.
Ronald Sperry, III, argued the cause for respondent. On
the brief were Dan G. McKinney and DC Law.
Before Tookey, Presiding Judge, and Egan, Judge, and
Kamins, Judge.
TOOKEY, P. J.
Reversed and remanded.
Cite as 328 Or App 22 (2023) 23
TOOKEY, P. J.
Plaintiff appeals a judgment dismissing the present action against defendant (the 2020 action), in which
plaintiff sought damages for defendant’s alleged breach of
the parties’ settlement agreement from a prior action (the
2019 action). The trial court dismissed the 2020 action after
granting summary judgment for defendant on the basis
that the 2020 action was barred by plaintiff’s voluntary dismissal with prejudice of the 2019 action. In a single assignment of error, plaintiff challenges the trial court’s grant of
summary judgment. For the reasons that follow, we reverse
and remand.
“We review a trial court’s grant of summary judgment for errors of law and will affirm if there are no genuine disputes about any material fact and the moving
party is entitled to judgment as a matter of law.” Beneficial
Oregon, Inc. v. Bivins, 313 Or App 275, 277,
496 P3d 1104
(2021) (internal quotation marks omitted). In so doing, we
view the facts “in the light most favorable” to the nonmoving
party—in this case, plaintiff—and “we examine ‘the pleadings, depositions, affidavits, declarations, and admissions
on file.’ ”
Id. (quoting ORCP 47 C).
On appeal, plaintiff argues that the trial court
erred in granting summary judgment, because dismissal of
the 2019 action does not bar the 2020 action by operation
of issue preclusion, claim preclusion, or waiver; defendant
responds that dismissal of the 2019 action does bar the 2020
action—either by operation of claim preclusion, issue preclusion, or waiver. We also understand defendant to contend
that the 2020 action is barred because, under the terms of
the settlement agreement, defendant’s full performance of
his obligations under the settlement agreement functioned
as a “condition precedent” to plaintiff’s voluntary dismissal
of the 2019 action.
The basis for the trial court’s determination that
the 2020 action was barred by the voluntary dismissal with
prejudice of the 2019 action is not entirely clear from either
the transcript of the summary judgment hearing or the order
granting summary judgment; however, as do the parties on
24 Wall v. Ash
appeal, we understand it to have been based on either issue
preclusion, claim preclusion, waiver, or on the basis of defendant’s “condition precedent” theory. Thus understood, the
issue on appeal is whether the trial court erred, as a matter
of law, when it determined that the judgment of dismissal
with prejudice in the 2019 action precludes plaintiff’s 2020
action. We conclude that the trial court erred.
Generally, “for a judgment to effect a preclusion of
further litigation … it must be a final judgment ‘on the
merits.’ ” Rennie v. Freeway Transport, 294 Or 319, 330,
656
P2d 919 (1982). “The term ‘with prejudice,’ expressed in a
judgment of dismissal, has a well-recognized legal import,
and operates as an adjudication on the merits.” Cornus Corp.
v. Geac Enterprise Solutions, Inc.,
252 Or App 595, 605,
289
P3d 267 (2012), rev den,
353 Or 428 (2013) (citing Sandgathe
v. Jagger,
165 Or App 375, 381,
996 P2d 1001 (2000)). Thus, “a
dismissal with prejudice normally precludes a later action.”
Id. at 604.
However, the preclusive effect of a former adjudication depends on “rules and principles governing the binding
effect on a subsequent proceeding of a final judgment previously entered”—namely, the doctrines of “claim preclusion,
also known as res judicata, and issue preclusion, also known
as collateral estoppel.” Drews v. EBI Companies, 310 Or 134,
139,
795 P2d 531 (1990). We consider application of those
two doctrines below, as well as the doctrine of waiver. But
first, we turn to, and dispatch with, defendant’s “condition
precedent” theory.
Condition Precedent. As noted, we understand
defendant to contend that the 2020 action is barred because,
under the terms of the settlement agreement, defendant’s
full performance of his obligations under the settlement
agreement functioned as a condition precedent to plaintiff’s voluntary dismissal of the 2019 action. That is, that
plaintiff’s voluntary dismissal of the suit establishes that
defendant had fully performed under the settlement agreement. At oral argument, to support that contention, counsel
for defendant referenced certain email exchanges between
the parties that appear in the record; plaintiff disagreed
with that understanding of the settlement agreement and
Cite as 328 Or App 22 (2023) 25
referenced certain portions of the parties’ discussion that
appear in the transcript of the 2019 settlement proceedings.
We reject defendant’s “condition precedent” theory; the record does not reflect that the trial court made a
determination as to the meaning of the terms in the settlement agreement, which, in our view, are ambiguous as to
the point raised by defendant, and “a party is entitled to
summary judgment in a contract action only if the terms of
the agreement are unambiguous.” Grants Pass Imaging &
Diagnostic Center v. Marchini, 270 Or App 127, 132,
346 P3d
644 (2015). Further, both parties referred to extrinsic evidence in the record to support their respective understandings of the terms of 2019 settlement agreement, and “the
existence of competing extrinsic evidence—and the triable
factual issue that the evidence creates[—]makes the resolution of the meaning of an ambiguous contract on summary
judgment inappropriate.” Dial Temporary Help Service v.
DLF Int’l Seeds,
255 Or App 609, 612,
298 P3d 1234 (2013).
Claim Preclusion. Defendant contends that claim
preclusion bars plaintiff’s 2020 action. We disagree.
“[T]he doctrine of claim preclusion prohibits any
party from prosecuting another action against the same
defendant where the claim in the second action is one which
is based on the same factual transaction that was at issue
in the first action and the first action resulted in a judgment
on the merits.” Cornus Corp., 252 Or App at 604 (quoting
Rennie v. Freeway Transp.,
294 Or 319, 323,
656 P2d 919
(1982)). However, where a judgment in the first action “is
based on an underlying settlement”—as it is in this case—
“the question whether claim preclusion applies [in a second
action] turns on the intent of the parties in settling the first
action.” In re Bertoni,
363 Or 614, 629,
426 P3d 64 (2018).
Further, “claim preclusion is an affirmative defense,” and
the party asserting that defense “ha[s] the burden of proving by a preponderance of the evidence” that a settlement
agreement in the first action has a claim-preclusive effect
on a second action.
Id. at 630; see also State v. M. J. F.,
306
Or App 544, 548,
473 P3d 1141 (2020) (“The preponderance
standard requires that the factfinder believe that the facts
26 Wall v. Ash
asserted are more probably true than false.” (Internal quotation marks omitted.)).
Here, viewing the record in the light most favorable to plaintiff, we conclude that defendant has not met
that burden. In particular, the settlement agreement at
issue—which appears only in a transcript of oral proceedings from the 2019 action—does not demonstrate that the
parties intended to preclude plaintiff from bringing a subsequent action based on defendant’s alleged breach of the
2019 settlement agreement. Further, the judgment of dismissal from the 2019 action is not in the summary judgment
record, so we are unable to determine what, if any, evidence
it contains of the parties’ intent to bar the claims at issue in
plaintiff’s 2020 action. Thus, given this record, we conclude
that defendant has not proved, by a preponderance of the
evidence, that the affirmative defense of claim preclusion
applies here.
Issue Preclusion. Defendant also argues that the
doctrine of issue preclusion bars plaintiff’s 2020 action.1
Again, we disagree.
“For a prior decision to be afforded issue-preclusive
effect, among other things, the pertinent issue must have
been ‘actually litigated’ and ‘essential to a final decision
on the merits in the prior proceeding.’ ” Leach v. Scottsdale
Indemnity Co., 261 Or App 234, 239,
323 P3d 337, rev den,
356 Or 400 (2014) (quoting Nelson v. Emerald People’s Utility
Dist.,
318 Or 99, 104,
862 P2d 1293 (1993)). “To satisfy the
‘actually litigated’ and ‘essential to a final decision’ requirement, a prior court’s resolution of an issue must either be
apparent from the face of a judgment or order or, if not
apparent from the face of a judgment or order, must have
been necessary to the resolution of the prior adjudication.”
Merrill v. A. R. G.,
286 Or App 487, 500,
398 P3d 954 (2017).
Further, where—as here—“the judgment [in the first action]
was based on a dismissal with prejudice after settlement by
1
Although “issue preclusion can be based on the constitution, common law,
or a statute,” Nelson v. Emerald People’s Utility Dist., 318 Or 99, 103,
862 P2d
1293 (1993), neither party suggests that a statutory or constitutional basis is at
issue here; we therefore address defendant’s arguments within the framework of
the common-law doctrine of issue preclusion. See City of Portland v. Huffman,
264
Or App 312, 315,
331 P3d 1105 (2014) (taking same approach).
Cite as
328 Or App 22 (2023) 27
the parties, it may be unclear whether or not the judgment
is actually determinative on the issue in question [in the
second action],” Koos v. Roth,
43 Or App 383, 387,
602 P2d
1128 (1979), and “[a]ssessment of such considerations …
can only be made in each case on the basis of an adequate
record of the prior proceeding and of the facts surrounding
its settlement,”
id. at 388.
Here, the record is not adequate to support a determination that the issues raised in the 2020 action were
“actually litigated” and “essential to a final decision” in the
2019 action. As noted above, the judgment of dismissal from
the 2019 action is not in the summary judgment record;
therefore, we cannot determine whether the resolution
of any issue raised in the 2020 action is “apparent from
the face of [that] judgment.” Merrill, 286 Or App at 500.
Likewise, defendant has not directed us to anything in the
summary judgment record clearly indicating that resolution
of issues raised in the 2020 action “must have been necessary to the resolution of the prior adjudication” in the 2019
action. Id.; see also Hancock v. Pioneer Asphalt, Inc.,
276 Or
App 875, 881,
369 P3d 1188 (2016) (“[T]he party asserting
issue preclusion [has the] burden to prove that the issue was
actually litigated and essential to a prior final decision on
the merits.”); Rowden v. Hogan Woods,
306 Or App 658, 672,
476 P3d 485 (2020) (“[I]n the absence of a clear indication
that [the issue] was actually determined …, the doctrine
of issue preclusion is inapplicable.”). We therefore conclude
that the doctrine of issue preclusion did not bar plaintiff’s
2020 action.
Waiver. Regarding waiver, defendant argues that
plaintiff’s voluntary dismissal of the 2019 action “is an
unequivocable acceptance of defendant’s performance” and
“acts as a waiver” to bar plaintiff’s 2020 action, which, as
noted above sought damages for defendant’s alleged breach
of the settlement agreement. We disagree.
“[A]cceptance of defective performance does not
prevent a party from seeking damages for that breach of
the contract.” C & K Market, Inc. v. Roccasalva, 246 Or App
277, 282 n 2,
265 P3d 81 (2011) (citing Richard A. Lord, 14
Williston on Contracts § 43:15, at 629 (4th ed 2000) (“While
28 Wall v. Ash
the acceptance of the defective performance operates to
waive the right to declare that the material breach discharged the obligor from further performance, it does not
waive the right to obtain damages for the breach.”)). Further,
viewed in the light most favorable to plaintiff, the summary
judgment record does not support defendant’s contention as
to plaintiff’s waiver of claims arising from the settlement
agreement—in particular, a declaration from plaintiff’s
attorney states that “[t]he dismissal judgment that was submitted says nothing about any waiver of claims for breach
of the parties’ agreement, and the agreement that was put
on the record did not contain any such provisions,” and that
“the dismissal was not intended as any sort of admission
that defendant had fully performed his obligations under
the settlement agreement.” We therefore conclude that, on
this record, defendant has not established that plaintiff’s
voluntary dismissal of the 2019 action constitutes a waiver
barring the 2020 action. See Steiner, Inc. v. Hill et al.,
191
Or 391, 397,
226 P2d 307 (1951) (“Defendants having alleged
a waiver on the part of the plaintiff, the burden of proof is
upon them to prove such waiver.”).
In light of the above, we conclude that the trial court
erred as a matter of law in granting summary judgment for
defendant on the basis that dismissal of the 2019 action precluded plaintiff’s 2020 action; accordingly, we reverse and
remand.
Reversed and remanded.
