Wall v. Ash

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 (1982). When parties sign a settlement agreement and the Plaintiff dismisses the underlying action with prejudice, that judgment does not automatically preclude further litigation.

Plaintiff sued Defendant in 2019 and settled, voluntarily dismissing the case with prejudice. Plaintiff sued Defendant in 2020 for breach of that settlement, and the court granted the Defendant summary judgment on the theory that the case was barred by claim preclusion, issue preclusion, waiver, or because the Defendant’s full performance of the settlement had been a condition precedent of the dismissal. Plaintiff assigned error, arguing that the dismissal was not a final judgment on the merits that would preclude further litigation. Rennie v. Freeway Transport, 294 Or 319, 330 (1982).

The Court dismissed the Defendant's arguments for claim preclusion (finding no intention for the settlement to preclude future claims as required by In re Bertoni, 363 Or 614 [2018]), issue preclusion (finding the record was not sufficient to show that the issue had been litigated and was essential to the outcome as required by Leach v. Scottsdale Indemnity Co., 261 Or App 234, 239, rev den, 356 Or 400 [2014]), waiver (finding that “acceptance 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 [2011]), and condition precedent (finding that the court record showed ambiguity in the terms of the settlement 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 [2015]). 

Rejecting each of the Defendant's arguments, the Court found that the court erred in granting summary judgment. 

REVERSED AND REMANDED.