Brownstone Homes Condo. Assn. v. Brownstone Forest Hts.

Because an addendum to a settlement agreement does not retroactively eliminate an original release of claims, the issue of whether a party may initiate an action despite the settlement agreement is a live issue, and therefore a motion to dismiss for mootness should be denied.

Defendant Capitol moved to dismiss this appeal on grounds that it had been rendered moot by amendments to a settlement agreement. Plaintiff initiated an action for defective construction against Contractor A&T, who was insured by Defendant Capitol. Defendant Capitol and Plaintiff settled the action, and a condition of the settlement included a stipulated judgment for Plaintiff. Later, Plaintiff made an addendum to the settlement agreement where Plaintiff would pursue damages against Contractor A&T directly. A&T appealed, and the Court of Appeals determined that the settlement agreement had extinguished A&T's liability. However, the Court of Appeals had not been notified of the addendum to the settlement agreement. Concurrently, A&T initiated an action against Capitol, which was removed to the U.S. District Court of Oregon. After an adverse judgment, A&T appealed to the Ninth Circuit, who certified the following question to the Oregon Supreme Court: Did the parties have the authority to amend the settlement agreement, thereby restoring Capitol's obligation of coverage to A&T? In another case decided by the Court, A&T Siding, Inc. v. Capitol Specialty Ins. Co., 358 Or 32, ___ P3d ___ (2015), the Court found that the addendum did not have the effect of restoring Capitol's obligation of coverage. Accordingly, the issue of whether Plaintiff has a right to recover from Capitol remains a live issue. Defendant's motion to dismiss was denied.