Air Rescue Systems Corp. v. Lewis

“To establish contempt of court based on ORS 33.015(2)(b), plaintiffs [must] prove that ‘(1) there was a facially valid court order, (2) the defendant knew of the order and (3) the defendant voluntarily failed to comply with the order.’” State v. Graham, 251 Or. App. 217, 220, 284 P.3d 515 (2012).

Defendant appealed a judgment for contempt. Defendant challenged the court’s authority to hold her in contempt for not complying with a voluntary settlement agreement that was not yet the subject of any court order or judgment. Defendant argued that their agreement was a private contract that was not subject to enforcement through the court’s contempt powers. In response, plaintiff argued that parties are bound by the settlement terms when the terms are agreed upon in open court; therefore, the terms acquire the effect of a court order or otherwise allows the court to hold a party in contempt for violating those terms. Plaintiff further argued that, because the terms of the oral settlement agreement were put on the record, they constituted an “order” within the meaning of ORS 33.015(2)(b). “To establish contempt of court based on ORS 33.015(2)(b), plaintiffs [must] prove that ‘(1) there was a facially valid court order, (2) the defendant knew of the order and (3) the defendant voluntarily failed to comply with the order.’” State v. Graham, 251 Or. App. 217, 220, 284 P.3d 515 (2012). The Court found that reading oral settlement agreements into the record in open court does not give the effect of a court order or render it an appropriate basis for holding a defendant in contempt of court. Thus, the Court held that the trial court lacked authority to hold the defendant in contempt for violating the settlement agreement. Reversed.