McDowell Welding & Pipefitting, Inc. v. United States Gypsum Co.

149 P.3d 173, 209 Or. App. 441, 2006 Ore. App. LEXIS 1898

• Court: Court of Appeals of Oregon
• Decided: December 6, 2006
• Docket: 01-2126; A125459
• Status: Published

Opinions

HASELTON, P. J.

Plaintiff McDowell Welding & Pipefitting, Inc., appeals a judgment in favor of defendants BE&K Construction Co., Inc. (BE&K) and United States Gypsum Company on (1) plaintiffs claims including claims of breach of contract and construction lien foreclosure and (2) defendants’ counterclaim for declaratory judgment and specific performance of a settlement agreement. Plaintiffs assignments of error pertain to four basic issues: Whether plaintiff was entitled to a jury trial on defendants’ counterclaim; whether the trial court properly construed particular contractual provisions; whether the trial court should have awarded prejudgment interest on the settlement amount; and whether the trial court lacked jurisdiction to enter summary judgment on plaintiffs claim after it had ruled on the counterclaim. We write only to address plaintiffs first argument, and reject the remainder of plaintiffs arguments without discussion. As explained below, we conclude that the majority of plaintiffs arguments concerning entitlement to a jury trial are not properly before us, given the nature of plaintiffs assignment of error concerning jury trial rights. Accordingly, we affirm the trial court’s judgment.

A brief explanation of the procedural posture of the case is necessary in order to explain our conclusion. Defendant United States Gypsum Company contracted with BE&K to build a wallboard factory in Rainier. Defendant BE&K, in turn, subcontracted with plaintiff to install pipes, instruments, and other factory components. After plaintiff had completed its work, a dispute arose concerning the amount that it was entitled to be paid.

In April 2001, plaintiff initiated this action, alleging a variety of breach of contract and related claims, seeking damages of approximately $2 million, and also seeking foreclosure of a construction lien. In their answer, defendants asserted a defense that the parties had agreed to settle the dispute for $800,000, and defendants also alleged a counterclaim for a declaratory judgment concerning, and specific enforcement of, the alleged settlement. Defendants moved, pursuant to ORCP 53 B,¹ to have the court try the counterclaim concerning the settlement agreement separately from plaintiffs claims. Although plaintiff opposed bifurcation, the trial court granted that motion.

Plaintiff then requested a jury for “the separate trial on [the] counterclaim relating to the alleged settlement agreement between the parties.” Defendants objected on the ground that the counterclaim seeking performance of the settlement agreement was equitable in nature and that there is no jury entitlement in equitable proceedings.

The trial court agreed with defendants and held a bench trial on the counterclaim. The central and dispositive issue on the counterclaim was whether plaintiff had, in fact, orally agreed to the alleged settlement. The court resolved that factual question in defendants’ favor. Accordingly, the trial court entered a limited judgment on the counterclaim, ordering specific performance of the settlement agreement.

Shortly thereafter, defendants moved for summary judgment on plaintiff’s claims, arguing that the settlement agreement released all of plaintiffs claims and that no genuine issue of material fact remained to be decided. Plaintiff opposed the motion, arguing (1) that the trial court lacked jurisdiction to consider the motion because plaintiff had, in the interim, filed a notice of appeal from the limited judgment and (2) that the settlement agreement did not release all of plaintiffs claims. The trial court granted defendants’ motion for summary judgment and entered a general judgment in defendants’ favor. Plaintiff then appealed the general judgment as part of the present appeal, as well.

As noted, plaintiff attempts to raise numerous issues on appeal, including the potentially provocative question of whether, or when, a plaintiff asserting a legal claim and defending against a related equitable counterclaim is entitled to a jury trial. See generally 209 Or App at 448 (Armstrong, J., dissenting). Whatever their abstract merit, however, we are procedurally precluded from addressing the substance of most of those challenges. Bluntly: With one exception addressed below, plaintiffs jury-trial-related challenges are not reviewable within the context of its assignments of error.

Three key rulings occurred in this case that relate to the jury trial issue: (1) The trial court granted defendants’ motion to try the equitable counterclaim separately from, and prior to, plaintiffs claim. (2) The trial court denied plaintiffs motion for a jury trial on the equitable counterclaim and decided that counterclaim in defendants’ favor. (3) The trial court entered summary judgment in defendants’ favor on plaintiffs claims on the ground that the settlement (the subject of the equitable counterclaim) had released plaintiffs claims.

On appeal, plaintiff assigns error only to the second of those rulings. That is, plaintiff does not argue that, because the facts of the legal claims and equitable counterclaim are interrelated, it was entitled to have its claims and the counterclaim tried together to a jury. Nor does plaintiff argue that the trial court erred in entering summary judgment on plaintiffs claims based on the court’s disposition of the counterclaim.² Rather, plaintiff has assigned error merely to the court’s denial of its request for a jury trial on defendant’s bifurcated equitable counterclaim.

Given that procedural posture, the “big picture” questions raised and resolved by the dissent simply are not in play.³ Again, the sole question presented by plaintiffs assignment of error is whether plaintiff was entitled to a jury trial on defendants’ separately tried counterclaim for specific enforcement of a settlement agreement. The answer to that question is uncomplicated: First, a claim for specific enforcement of a settlement agreement is an equitable claim. Hughes v. Misar, 189 Or App 258, 260 n 2, 76 P3d 111 (2003), rev den, 336 Or 615 (2004). Second, there is no right to a jury-trial in an equitable proceeding for specific performance of a contract. See generally Phillips v. Johnson, 266 Or 544, 549, 514 P2d 1337 (1973). Thus, given the scope of the assignment of error, we conclude that the trial court did not err in denying plaintiffs motion for a jury trial on the separately tried equitable counterclaim.

With that said, we emphasize what we are not deciding in this case. We are not deciding whether the legal claims and equitable counterclaim should have been tried together to a jury in light of the common factual issues. Nor are we deciding whether, or to what extent, a trial court’s antecedent resolution of disputed issues of fact in adjudicating an equitable counterclaim should be given preclusive effect with respect to the later resolution of legal claims in the same litigation. But see Safeport, Inc. v. Equipment Roundup & Mfg., 184 Or App 690, 708-14, 60 P3d 1076 (2002) (court erred in dismissing plaintiffs breach of contract claim based on its earlier resolution of related lien foreclosure counterclaim).

The intersection of legal and equitable claims and counterclaims involving common disputes of fact in the same proceeding is complex and difficult. As we noted in Safeport:

“The dilemma involves how to resolve inconsistencies between the decisions of equally competent finders of fact with respect to the same issue in a single action. For example, suppose that a trial court decides that a lien claimant did not breach the parties’ contract and awards the full amount sought. Then suppose that a jury determines that the claimant did breach the contract and awards damages to the other party on a counterclaim. Do the recoveries offset? If not, is the claimant entitled to proceed with a foreclosure sale even though it owes a net award to the opposing party? Put another way, if law of the case and preclusion principles are inapplicable, what principles determine the ultimate relief to which each party is entitled? Does the jury’s decision override the court’s opposing findings? Unsatisfying as it may seem, we can only speculate concerning those matters at this stage, because no jury determination of the breach of contract claim has yet been made in this case.”

184 Or App at 713 n 3 (emphasis in original). Just as those interesting issues were beyond our reach in Safeport, they are beyond our proper purview in this case.

Affirmed.

1 ORCP 53 B provides:

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, cross-claim, counterclaim, or of any separate issue or of any number of claims, cross-claims, counterclaims, or issues, always preserving inviolate the right of trial by jury as declared by the Oregon Constitution or as given by statute.”

2 Although, as noted, plaintiff does assign error to the trial court’s summary judgment on its claims, it argues only that the trial court lacked jurisdiction to rule on the summary judgment motion because of the pendency of the appeal from the limited judgment. We reject that argument without discussion.

3 Indeed, the dissent advances an analysis that is completely, qualitatively different from that presented and joined in the parties’ briefs.