Stonecrest Properties, LLC v. City of Eugene

An incidental beneficiary has no standing to enforce bond. The Court will look at the intent of the parties to determine whether a nonparty is an incidental beneficiary.

This was the second of two cases regarding an unfinished housing development in Eugene. At issue is an agreement entered into by the original developer and the City to make improvements to the subdivision. The main contention was whether Plaintiff, the successive developer, had standing as a third-party beneficiary. The contention arose because the trial court granted Defendant’s motion for summary judgment against Plaintiff reasoning that they were incidental beneficiaries and did not have standing. Specifically, Plaintiff alleged that they were a donee beneficiary, which would give them standing. A person is a donee beneficiary if, under the circumstances, it appears from the terms of the contract that the purpose of the promisee in obtaining the promise is “to make a gift to the beneficiary or to confer upon him a right against the promisor.” However, the Court found that Plaintiff failed to indicate anything in the record that would suggest there was any intent within the agreement that indicated they were more than an incidental beneficiary. Affirmed.