Teegarden v. State of Oregon

A settlement agreement barring a party from filing any further actions against another party does not preclude an action for intentional torts when the settlement agreement was induced with a material misrepresentation.

Teegarden was dismissed from his employment at the MacLaren Youth Correctional Facility after filing several complaints to his management. Teegarden pursued grievances against Oregon Youth Authority and his management (collectively OYA) through his union. The parties reached a settlement agreement, which included provisions that “this Agreement constitutes the good faith resolution of all claims or potential claims [plaintiff] might have against the State or OYA” and that “neither the State of Oregon, OYA, nor any of their agents or attorneys has made any representations or promises concerning the terms or effects of this agreements other than those expressly set forth herein.” With the cooperation of OYA, criminal charges were brought against Teegarden after the parties signed the agreement, causing him to be dismissed from new employment with a different employer. Teegarden was acquitted and filed a complaint against OYA for, inter alia, malicious prosecution and an invalid release agreement. The State moved for judgment on the pleadings, which was granted. On appeal, Teegarden argued that the settlement agreement was unenforceable because of OYA’s fraudulent misrepresentation regarding the criminal charges and that the agreement did not bar him from bringing the claims for malicious prosecution and intentional interference with a prospective economic relationship. OYA argued that the disclaimer clause in the agreement precluded any claims by Teegarden. The Court held the trial court erred by concluding on the pleadings the agreement was enforceable despite Teegarden's assertions of OYA's material misrepresentations and that the agreement did not “purport to release OYA from liability for future intentional torts for which the underlying facts have not yet occurred.” Reversed and remanded.