Wall v. Ash

328 Or.App. 22

536 P.3d 1101

Richard WALL, Plaintiff-Appellant,

v.Ed ASH, dba Ash Racing Components, Defendant-Respondent.

A175911

Court of Appeals of Oregon.

Argued and Submitted August 16, 2023.

September 13, 2023

Christopher W. Peterman, Roseburg, argued the cause for appellant. Also on the brief was Keith D. Ropp.

Ronald Sperry, III, Roseburg, 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.

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 P.3d 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 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 P.2d 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 P.3d 267 (2012), rev. den. , 353 Or. 428, 299 P.3d 889 (2013) (citing Sandgathe v. Jagger , 165 Or App 375, 381, 996 P.2d 1001 (2000) ). Thus, "a dismissal with prejudice normally precludes a later action." Id. at 604, 289 P.3d 267.

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 P.2d 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 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 P.3d 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 P.3d 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, 289 P.3d 267 (quoting Rennie v. Freeway Transp. , 294 Or. 319, 323, 656 P.2d 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 P.3d 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, 426 P.3d 64 ; see also State v. M. J. F. , 306 Or App 544, 548, 473 P.3d 1141 (2020) ("The preponderance standard requires that the factfinder believe that the facts 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 P.3d 337, rev. den. , 356 Or. 400, 339 P.3d 440 (2014) (quoting Nelson v. Emerald People's Utility Dist. , 318 Or. 99, 104, 862 P.2d 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...