This is аn action for professional negligence. Plaintiffs allege that defendant, their
I. BACKGROUND
A. Substantive Facts
Because this appeal arises from the trial court’s grant of summary judgment, we state the substantive facts in the light most favorable to plaintiffs, the nonmoving party. Jones v. General Motors Corp.,
In 2003, plaintiffs entered into an agreement with defendant to sell their farm and ranch to him on a 12-year installment contract, with payments due each April. Plaintiffs withheld from the sale a 40-acre parcel that contained a stone quarry; the quarry was their only planned source of retirement income. They told defendant that, although the quarry was not part of the sale, they would give him an option to purchase the quarry in the event that they eventually decided to sell it. Defendant drew up the parties’ installment contract for the sale.
In August 2005, defendant told plaintiffs that he needed to borrow money to make the annual payment that had been overdue since April. Plaintiffs executed a statutory warranty deed for parcels that were conveyed in earlier installments, and defendant took out a loan from NW Farm Credit Services for $388,852. Defendant then made a payment of $125,000 for the 2005 installment, and plaintiffs gave defendant a statutory warranty deed for the land covered by that payment.
In 2008, defendant told plaintiffs that he again needed to borrow money from NW Farm Credit Services to pay plaintiffs, as well as to pay his own bills. Defendant asked plaintiffs to meet defendant and his wife at defendant’s law office, so that they could walk over to the Wallowa County Title Company. Plaintiffs did as requested and, at the title company, were instructed to sign certain documents, but were not given time to read those documents. Plaintiffs believed that the documents were similar to the deeds and other documents that they had signed in 2005.
The documents were not similar to the ones that plaintiffs signed in 2005. Instead, the 2008 documents differed from earlier deeds in important respects: The 2008 documents included a deed of trust, whereby plaintiffs granted NW Farm Credit Services a security interest in their own property to cover defendant’s outstanding indebtedness (which had increased to $447,500). Moreover, that deed of trust covered ranch land that defendant had not yet purchased under the installment land sale contract, as well as the stone quarry.
Defendant later informed plaintiffs that he was on the verge of bankruptcy and would not be able to make further payments on the land sale contract. Plaintiffs, now uneasy about their relationship with defendant, sought advice from a family friend, Roach, who had been a judge in Washington State. Roach was not familiar with Oregon law and did not have a copy of the 2008 deed of trust when he sрoke with plaintiffs, but Roach was concerned that plaintiffs had not fully understood the documents they had signed.
Plaintiffs called Tucker on December 14, 2009, and then met with him later that month. During the meeting or soon after, Tucker instructed plaintiffs to obtain a copy of the deed of trust from the county recorder.
After plaintiffs obtained the deed of trust, Tucker reviewed the documents. He also consulted with Michael Greene, a Portland attorney specializing in legal malpractice. Tucker then had several telephone conversations with plaintiffs in early January 2010, discussing his findings. And, on January 12, 2010, Tucker sent plaintiffs a letter summarizing his discussions with plaintiffs, the steps that he hаd taken to evaluate plaintiffs’ potential claims against defendant, including meeting with Greene regarding legal malpractice issues, and his initial assessment of those potential claims. In the letter, Tucker noted that, “[a]fter we talked, you were still very concerned and wanted to meet with the attorney in Portland on this matter. You are going to meet with Greene this week.” Through those discussions with Tucker in early January 2010, plaintiffs recognized that the documents they signed in 2008 at defendant’s request had subordinated their property interest, including their interest in the quarry, to the $447,500 lien owed to NW Farm Credit Services.
About a month later, on February 20, 2010, defendant contacted Tucker and informed him that defendant had found a purchaser for the prоperty — but that the purchaser was insisting that the quarry be part of the deal. Defendant claimed that, if plaintiffs did not agree to the sale, he would stop making payments, go bankrupt, and, perhaps, sue plaintiffs for damages. Tucker relayed that information to plaintiffs.
Tucker, acting on behalf of plaintiffs, began negotiating with defendant regarding the potential sale. After about two weeks, on March 4, 2010, the parties reached an agreement that would allow defendant to sell the property and pay off plaintiffs. Tucker set out the terms of the agreement in an email to defendant, which provided:
“This email confirms our settlement. [Plaintiffs] and you have agreed as follows:
“You will deliver to [plaintiffs] a check pаyable to them and to me in the amount of $15,000.
“[Plaintiffs] will pick up the check from your office and will go to Wallowa Title Company and sign the deed.
“[Plaintiffs] will deliver the check to me.
“The parties agree to a mutual general release. The present plan is to have you prepare a general mutual release, sign it and deliver it to me.
“I am authorized to release the check to [plaintiffs] upon their signing the mutual release and my return of it to you.
“This settlement is conditioned on the closing of the sale with [the third-party purchaser, Rock’n J Properties].
“Please confirm your agreement. Once I have your confirmation, I will email new instructions to the escrow company and instruct [plaintiffs] to pick up the check and go to the title cоmpany.”
Defendant responded, “I accept. We must get it done today. This is holding up closing as we ‘speak.’” Although the agreement provided for a mutual general release, the parties’ agreement did not address how that mutual general release would be phrased.
Pursuant to the parties’ agreement, the sale to Rock’n J Properties closed and plaintiffs were paid the remaining balance on the land sale contract out of the proceeds from the sale. Defendant subsequently tendered the $15,000 check contemplated by the settlement. On March 8, 2010, Tucker sent an email to defendant that stated:
“Thought I would let you know that I received in today’s mail your check payable to [plaintiffs] and me. You will be preparing the mutual release. If there are any problems, let me know.
“This was not an easy matter for you or [plaintiffs]. I am glad it is over.”
Tucker later contacted plaintiffs and told them that he had in his possession the release drafted by defendant. Plaintiffs, however, did not see the draft release until April 2010. When they read it, they refused to sign it because they thought “that it contradicted
On April 16, 2010, Tucker notified defendant by email about plaintiffs’ concerns with the draft release:
“[Plaintiffs were in my office to sign the release. They asked if it should reference the $15,000. That was part of the settlement. They would be more comfortable if the release recited this part of the settlement.
“Could you add to second pаragraph: ‘Upon receipt by [plaintiffs] of the sum of $15,000, the sufficiency of which is hereby acknowledged * * *
H: * * *
“Thank you for your patience. We are now in a position to finalize this matter.”
Ten days later, on April 26, 2010, Tucker sent a follow-up email to defendant, which reiterated the same concern regarding reference to the $15,000 payment:
“I thought I sent you an email a couple weeks ago indicating that [plaintiffs] were ready to sign the release but wanted language added indicating that the release was for payment of $15,000. I suggested adding to the second paragraph ‘For the consideration of $15,000 to be paid by [defendant and his wife] to [plaintiffs] and for other valuable consideration,’ the parties herеby * * *
“I went back to my emails and can not seem to find the email. I either misfiled it or did not hit the ‘send’ button.
“Contact me if there is any problem. Otherwise, please make this change, both you and [your wife] sign duplicates and return them to me asap. I will then get [plaintiffs] to sign, return one original to you and release the check I hold.”
(Underscoring omitted.) Plaintiffs terminated their relationship with Tucker before signing the release and, ultimately, never signed any release. They returned the $15,000 check to defendant.
B. Procedural History
In December 2011, plaintiffs filed this action against defendant and his law firm, alleging a claim for professional negligence. In their first amended complaint, the operative pleading in the case, plaintiffs alleged that defendant breached his duty of care as plaintiffs’ lawyer by, among other things, failing to afford plaintiffs an opportunity to review the note and 2008 trust deed, failing to tell plaintiffs that that trust deed would subordinate their interest to the lien held by NW Farm Credit Services, and arranging a sale that forced plaintiffs to give up their interest in the quarry. Plaintiffs sought $2 million in damages as a result of the forced sale of the quarry.
Defendant denied the bulk of plaintiffs’ allegations and, in his original answer, asserted various defenses, including “release” and “compromise and settlement.”
Meanwhile, defendant had moved for summary judgment on plaintiffs’ claim, asserting two alternative bases for the motion. First, defendant argued that plaintiffs’ claim was commenced beyond the two-year statute of limitations for negligence, ORS 12.110(1), because plaintiffs knew or should have known of defendant’s alleged malpractice by the time that they consulted Roach, the former judge, about defendant’s actions — a meeting that took place sometime befоre plaintiffs placed a call to Tucker on December 14, 2009. Second, defendant argued that plaintiffs and defendant entered into a release agreement on March 4, 2010, which “releases any and all claims arising from the contract for the purchase and sale of land described in
In response to defendant’s motion, plaintiffs argued that genuine issues of material fact precluded summary judgment on either statute of limitations or settlement grounds. With respect to timeliness of the action, plaintiffs argued that it “was not until after Mr. Tucker reviewed the documents and consulted with Michael Greene, expert attorney out of Portland specializing in legal malpractice, that they first became aware, January 8-12, 2010, of that damage caused by [defendant].” As for the question of settlement, plaintiffs insisted that the parties had never formed an enforceable release agreement. Plaintiffs summarized their argument as follows:
“• The offer made was not certain in nature or extent of the obligations of each party.
“• There was never a meeting of the minds as to the objective manifestations of the intent of both parties to form the release.
“• Consideration in the form of financial incentive was not accepted.
“• The March 4th 2010 Mutual Release Agreement was never fully accepted by the Plaintiff.”
(Emphasis by plaintiffs.)
After a hearing on defendant’s motion, the trial court ruled in defendant’s favor in a letter opinion. The letter opinion stated:
“1. The Court finds in favor of the Defendants and grants the Summary Judgment Concerning the issue of statute of limitation.
“2. The Court will also find that Plaintiffs and Defendants entered into a negotiated agreement that is both valid and enforceable.
“[Defendants’ counsel] may prepare a proper judgment in these matters.”
Approximately one month later, the trial court then signed an order prepared by defendant’s counsel. The order was consistent with the reasoning in the letter opinion but elaborated on the basis of the ruling. Whereas the letter opinion had been silent as to whether the court was ruling on defendant’s “counterclaim” or “defense” regarding settlement and compromise, the order explicitly stated that, in addition to plaintiffs’ claim being barred by the statute of limitations, “Defendants are entitled to a dismissal of Plaintiffs’ claims based upon their defense that Plaintiffs and Defendants entered into a negotiable settlement agreement that is both valid and enforceable. Said agreement included a general mutual release that bars Plaintiffs’ claims.” The court later entered a general judgment stating:
“Based on the Order Granting Defendants’ Motion for Summary Judgment on file herein which disposed of all claims between the parties, it is:
“HEREBY ADJUDGED that Plaintiffs’ claims against Defendants are dismissed with prejudice and that Defendants are awarded their cоsts and disbursements incurred herein, to be entered in a supplemental judgment.”
Plaintiffs timely appealed that judgment.
II. ISSUES ON APPEAL
A. Assignments of Error and Preservation
In their opening brief, plaintiffs raise two assignments of error. Plaintiffs’ first assignment of error is straightforward and concerns the court’s ruling on the statute of limitations. Their second assignment, however, is more complicated as the result of some procedural irregularities. In the second assignment of error, plaintiffs assert that
“[t]he trial court only granted summary judgment on defendants’ affirmative defense of statute of limitations and declined to grant defendants summary judgment on their counterclaim for specific performance of a contract. Consequently, the trial court did not commit reversible error with respect to defendants’ motion for summary judgment on their сounterclaim. Nonetheless, the trial court’s superfluous factual finding with respect to the contract was erroneous, legally and factually, and plaintiffsask the Court to give the trial court some guidance on remand.”
Following that assignment, plaintiffs develop four arguments as to why their claim for legal malpractice is not barred by the March 4 settlement agreement: (1) the scope of the release agreement is ambiguous and should be resolved by the trier of fact; (2) there are questions of fact as to when the parties intended the release agreement to be legally binding; (3) defendant’s law firm — as opposed to defendant himself — was not released from malpractice liability; and (4) “[t]he Court, trying this de novo and sitting in equity, shоuld not order specific performance because of [defendant’s] overreaching, and the harshness and oppressiveness that result would cause.” (Boldface omitted.)
In his response brief, defendant addresses plaintiffs’ first assignment of error on the merits, arguing that the trial court correctly ruled that plaintiffs’ claim was barred by the statute of limitations. Defendant also argues, in the alternative, that we should not even reach the merits of the trial court’s ruling on the statute-of-limitations issue, because “there is an independent and unchallenged basis for affirming the trial court’s dismissal of plaintiffs’ claims” — namely, the court’s ruling on defendant’s affirmative defense of compromise and settlement. Defendant argues that, notwithstanding thе second assignment of error, which addresses the counterclaim regarding settlement and compromise, plaintiffs “did not object to the form of the trial court’s Order and have not assigned error to the trial court’s granting defendants summary judgment on their affirmative defense of compromise and settlement.” (Emphasis added.) Furthermore, defendant argues that, even if we were to treat the second assignment of error as a challenge to the court’s summary judgment ruling on the affirmative defense of settlement and compromise, some of the arguments that plaintiffs now advance on appeal are unpreserved.
In reply, plaintiffs suggest that we should disregard any technical defects in their second assignment of error, because it is clear from the briefing that they intended to assign error to the trial court’s ruling regarding settlement and compromise. Moreover, plaintiffs argue that defendant, after intentionally styling the issue of settlement and compromise as a counterclaim for summary judgment, should not be permitted to “rewrite what actually happened below” in an effort “ [t] o avoid being held to the burden of production required for summary judgment on a claim for specific performance of a contract (by clear and convincing evidence), and to avoid potentially having this case decided de novo on a deficient record.” Finally, plaintiffs argue that they properly preserved the issues raised on appeal by arguing to the trial court that “they did not agree to release their legal malpraсtice claims and that any release would not be enforceable until a final writing was approved. * * * See Gadda v. Gadda,
Having considered the parties’ respective positions, we conclude that plaintiffs have adequately challenged both bases of the court’s summary judgment ruling, so as to permit appellate review of both bases for the ruling. Although we are not persuaded that defendant has attempted to “rewrite” the court’s ruling to avoid a different standard of review,
That still leaves the question of preservation. On that question, we agree with defendant that plaintiffs have not wholly preserved the issues that they raise in support of their second assignment of error. Whether the source of the argument was an affirmative defense or a counterclaim, the legal issue before the court on summary judgment was clear to both parties and the trial court: Did plaintiffs and defendants enter into a release agreement that barred plaintiffs’ negligence claim as a matter of law? The parties’ arguments were joined on that issuе below, and plaintiffs confined their arguments to whether there was a disputed issue of fact regarding aspects of contract formation: offer, meeting of the minds, consideration, and acceptance. At no point did plaintiffs suggest — as they now suggest on appeal — that the term “mutual general release” was ambiguous and would not cover malpractice; that the release only applied to defendant and not his law firm; or that there were other equitable reasons to excuse any breach of an agreement. Those issues are fundamentally different from the issue of whether the parties entered into an enforceable settlement, and were not fairly encompassed within the mattеrs raised below. As a result, we conclude that they are not properly before us on appeal. See Blankenship v. Smalley,
B. Enforceability of Release Agreement
1. Standard of Review
On review of a trial court’s grant of summary judgment, “we view the evidence and all reasonable inferences that may be drawn from the evidence in the light most favorable to * * * thе party opposing the motion.” Jones,
Because defendant, the moving party, would have had the burden of proof at trial on his affirmative defense of settlement and compromise, he bore the burden of producing evidence to establish that defense as a matter of law at the summary judgment stage. Sunset Presbyterian Church v. Brockamp & Jaeger,
2. Analysis
As detailed above, the issue before the trial court, as framed by the parties, was whether the “mutual general release” was an enforceable agreement between plaintiffs and defendant. Plaintiffs did not dispute below that they had reached a settlement agreement with defendant, or assert that Tucker’s email to defendant detailing the terms of the settlement was inaccurate or otherwise did not reflect the terms of the parties’ agreement. Instead, plaintiffs argued below, and now argue on appeal, that the parties’ agreed-to “mutual general relеase” was not valid and enforceable until they agreed on the exact terms and form of the release agreement. We, like the trial court, disagree with that view of the law on this record.
“Whether a contract existed is a question of law.” Ken Hood Construction v. Pacific Coast Construction,
In assessing whether a contract was formed, Oregon applies an objective theory of contracts. See State v. Heisser,
If the parties’ communications and actions manifest assent to be bound by promises, they will form a contract unless the promises are “so indefinite that a court cannot determine what the parties intended.” Logan v. D. W. Sivers Co.,
Thus, even where parties сontemplate that additional documents will be finalized in the future, the question remains one of mutual assent:
“Where parties agree to reduce their agreement to writing, the question arises as to whether their negotiations constitute a contract. *** [W]here all the substantial terms of a contract have been agreed on and there is nothing left for future settlement, the fact alone that it was the understanding that the contract should be formally drawn up and put in writing does not leave the transaction incomplete and without binding force, in the absence of a positive agreement that it should not be binding until so reduced to writing and formally executed. Where, however, the writing is regarded as a prerequisite to the closing of the contract, the agreement does not become binding if there has been a failure to reduce it to writing.”
Britt v. Thorsen,
For example, in Kaiser Foundation Health Plan v. Doe,
Likewise, in Hughes v. Misar,
In this case, the uncontroverted evidence establishes that, after plaintiffs hired an attorney to represent them in pursuing remedies against defendant and consulted a malpractice lawyer about defendant’s conduct, the parties objectively manifested their mutual intent to enter into a binding “mutual general release” on March 4, 2010, conditioned only on the closing of the sale of the ranch and quarry to a third party. The email from plaintiffs’ counsel explicitly stated that it was to “confirm!] our settlement,” of which the “mutual general release” was one among many terms. Plaintiffs’
Although the agreement indicated that a written release would follow — and tied the release of the check to that agreement — there is no suggestion that the parties intended the agreement to be tentative or unenforceable until the signed release was obtained. To the contrary, every indication from the parties’ actions objectively manifested their mutual understanding that their dispute had been settled, notwithstanding the lack of a written release agreement. After receiving the $15,000 check from defendant, plaintiffs’ counsel acknowledged that defendant “will be preparing the mutual release” but nevertheless stated, “This was not an easy matter for you or [plaintiffs]. I am glad it is over.” Later emails from plaintiffs’ counsel about revisions to the form of release likewise indicated that the settlement had already been achieved, and that the parties were memorializing the agreement, not negotiating it. In fact, one of the last emails from plaintiffs’ counsel to defendant indicated that only ministerial tasks remained after his requested changes were made to the form — obtaining duplicate signatures from both sides and releasing the check. Plaintiffs’ subjective belief that there were material terms remaining to be negotiated — a belief that was never communicated to defendant — does not makе the agreement unenforceable. Under an objective theory of contracts, there is no genuine issue of material fact on this record as to whether the parties intended to be bound by their March 4 agreement to enter into a mutual general release.
Having concluded that the parties intended to be bound by their agreement to enter into a “mutual general release,” the remaining question is whether that term is too indefinite to be enforced. It is not. A “general release” is understood by lawyers (and perhaps even by laypersons) to refer to a release of all then-existing claims within the contemplation of the parties in general, as opposed to a release of specific claims. See, e.g., Ristau v. Wescold, Inc.,
Affirmed.
Notes
Defendant’s law firm is also a defendant in this action. For readability, we generally do not distinguish between defendant and his law firm, unless otherwise noted.
Defendant’s ninth affirmative defense stated that “an agreement compromising and settling any and all claims assertable by plaintiffs against defendants was entered into on February 24, 2010, and that any claims plaintiffs may have or have had are thereforе barred by the terms of such agreement.”
Plaintiffs’ perception that defendant might avoid de novo review and the clear-and-convincing standard are premised on a misunderstanding of the role of the trial and appellate courts with regard to summary judgment. Neither court, when considering whether a party is entitled to judgment as a matter of law at the summary-judgment stage of the case, is permitted to make factual findings or weigh the evidence, regardless of whether the underlying claim or requested relief is equitable in nature. See Brown v. Guard Publishing Co.,
Even assuming that the court’s alternative reasoning required a separate assignment of error under these circumstances, but see Marc Nelson Oil Products, Inc. v. Grim Logging Co.,
Although plaintiffs, by way of a footnote, suggest that the preservation requirement should give way entirely in this case because of uncertainty surrounding the nature of the court’s ruling, they do not develop any argument in that regard. — and, given the overlap between the affirmative defense and counterclaim, we are persuaded that we should adhere to ordinary principles of preservation under the circumstances of this case.
Plaintiffs do not argue that Tucker, their attorney, was somehow without authority to provide the objective manifestations of assent that he did. See MacDonald v. Cottle,
Because we affirm on the basis of the release, we do not address the trial court’s alternative ruling that plaintiffs’ negligence claim was filed beyond the statute of limitations.